What is the exit?
When someone inquires about a hard money loan, don’t be suprised to get the question back, “what is the exit?”. Hard money lenders want to know how you are going to pay them off. They want the borrower to explain what their strategy is for paying off the hard money loan. Are you going to refinance the property? If so, can you qualify based on your income, credit score, income, etc. Are you going to sell the property? If so, you need to plan on doing more than just putting up a pretty for sale sign in the yard. Successful real estate investors spend time thinking about their exit strategy before buying a property. And remember, always have a backup plan!