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Can we grade equally all the hard money lenders or not is the query. And the answer is quite simple and straightforward that we can’t grade all the hard money lenders equally. There are certain logical reasons behind this as we may divide them into different categories based upon their financial pool or the way they deal with their borrowers and their outlined terms, conditions and policies. At first place if we talk about their financial pool hard money lender could be a guy that has $100,000 who is willing to lend it or could be a company that is multimillion dollar company that has money to lend so hard money lenders.

There is another way in which we can categorize hard money lenders and that is based upon their outlined terms, conditions and policies. If hard money lenders won’t give you specifications about their term, conditions and policies, and say we just have to check the property out or we take things on case by case scenario stay away from that. You need an outline. You need to know what they are willing to do and what they are not willing to do. If they are giving answers like we will just have to see or we take that on a cases by case basis or it just depends on the neighborhood; such kind of answers mean that they are emotional hard money lenders. They are making decisions based upon emotion not making decisions based upon logic. That was one of the problems that we experienced almost a decade ago that hard money lenders were not outlined their terms and conditions and areas of expertise; one day they will be happy doing a property and the next day they would not be willing to lend on that and the question was why they are willing to lend on this property formerly and why not when we did a couple of months ago and the answer would be we just felt good about it at that time. Question would be why you don’t feel good about it now. Well we just don’t even though another property may have been a successful one. They are lending based upon emotions not based upon logic.

On the other hand there are logical hard money lenders who have clearly outlined terms, conditions and policies on their professionally maintained website. They clearly define the areas for which they serve. They openly publish all their expertise and areas of interest for hard money lending. They fall themselves in a defined category of Online Hard Money Loans. The list is open to the public, everybody sees it that there is not some way that they can change overnight, it’s widely available, it is widely accepted that you know the areas they are willing to serve.

So, Logical hard money lenders are going to lend based upon the value of the real estate and they are not going to be concerned about emotional issues. They are going to evaluate based upon established guidelines and also including their flow charts, and underwriting criteria that are put together and hard money lenders are going to lend based upon the value of the property not based upon the individual. So an emotional hard money lender is going to be worried about a variety of different things that how it relates to a potential owner or a borrower rather than how it relates to a property. So bottom line is that hard money lenders are not graded equal. There are emotional hard money lenders and there are logical hard money lenders and farther you can stay away from emotional hard money lenders the better off you are going to be and more successful you are going to be as a real estate investor.