Hard Money Broker Business Plan, Marketing Plan, How To Guide, and Funding Directory
The Hard Money Broker Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Hard Money Broker business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.
Your Business Planning Package will be immediately emailed to you after you make your purchase.
Product Specifications (please see images below):
- Bank/Investor Ready
- Complete Industry Research for the Industry
- 3 Year Excel Financial Model
- Business Plan (26 to 30 pages)
- Marketing Plan (24 to 28 pages)
- 425+ Page Funding Directory
- PowerPoint Presentation
- Loan Amortization and ROI Tools
- Three SWOT Analysis Templates
- How to Start a Business Guide
- Easy to Use Instructions
- All Documents Delivered in Word, Excel, and PowerPoint Format
- Meets SBA Requirements
Hard money brokers play an important role as a relates to securing capital specific for real estate projects. Unlike direct hard money lenders, hard money brokers operating capacity by sourcing funds on behalf of investors and placing them with real estate entrepreneurs that have economically viable projects. Like all hard money focused debt instruments – the terms of these loans are typically considered to be intermediate. Usually, a hard money loan last anywhere from six on the terms of the mortgage. In almost all instances, there are substantial fees associated with sourcing a hard money loan on behalf of a real estate entrepreneur given the complexity of these types of financing deals. Usually, a commission of 4% to 6% is provided to the hard money broker in exchange for sourcing the funds from appropriate investors. The interest rates on hard money can vary substantially but usually there in the 8% to 15% range. As such, these loans are truly only appropriate for highly qualified real as the entrepreneurs that can quickly acquire property, fix it up, and then sell it to the general public. This is why these loans are considered to be short-term only or the entrepreneur will typically seek to acquire a traditional mortgage in order to refinance their hard money loan.
Hard money brokers operate in a very specific space by having a number of investors on standby that are willing to provide capital for economically viable real estate projects. It should be noted that the barriers to entry for a new hard money brokerage business is considered to be moderately low. Dual and the business must be licensed as a mortgage brokerage in order to source this very specific type of financing. Given the complexities of mortgage laws, a properly qualified real estate attorney that has an understanding of mortgage financing laws should be retained in order to make sure that the hard money brokerage firm is operating within the letter of the law at all times. In some cases, a hard money broker may be able to avoid certain licensing procedures provided that they operate specific for similar operating activities. Only a qualified attorney can make the appropriate determination as to what licenses would be appropriate and are applicable to a hard money brokerage business. The startup cost associated with this type of company typically range anywhere from $10,000 to $50,000 depending on the immediate size and scope of the business.
A hard money broker business plan should be developed if the entrepreneur is seeking capital from a private funding source in order to commence operations. It should be immediately noted that most financial institutions are not willing to provide a loan to a hard money brokerage given that they are considered to be a financial business. However, if the entrepreneur has a significant amount of tangible assets that can be used as collateral than they may qualify for a working capital line of credit secured by these existing assets. Of course, a business plan is going to be required and this document should feature a three year profit and loss statement, cash flow analysis, balance sheet, three shoes page, as well as the industry information specific for the hard money industry. As it relates to industry information is an independent hard money brokers operate within the United States. Each year, these businesses generate an aggregate of about $40 billion in fees not only from closing costs but from interest as well. This industry is expected to grow in lockstep with the economy as a whole and with the real estate market. During times of economic recession, hard money lenders are generally able to remain profitable and cash flow positive given the fact that they are able to provide a significant amount of short-term capital for still economically viable real estate deals.
Frequently developed in conjunction with the business plan, is the hard money broker SWOT analysis. As a relates to strengths, the barriers to entry for a hard money broker business are low, the startup costs are low, and the fees can be substantial for a highly seasoned professional that has an understanding of this short-term lending business. These businesses, again, are generally able to always remain profitable given their low operating cost and high fees associated the placement of mortgage funds.
For weaknesses, the deals that are done in regards to using hard money are usually far and few between. Most highly seasoned real estate entrepreneurs and investors are generally qualified to obtain traditional financing such as a real estate backed line of credit or a mortgage. As such, the unique need for hard money usually only occurs when there is a very specific time frame in which a loan is needed and traditional financing takes too long. Additionally, there are a myriad of laws that must be adhered to as relates to sourcing funds for private hard money investor and providing them to a real as the entrepreneur. Again, it is imperative that an attorney is retained by the firm in order to make sure that each deal falls within the letter of the law and does not violate any real estate settlement procedures.
The opportunities afforded to a hard money broker are substantial. The way that these businesses grow is typically by sourcing additional investors that are willing to put up additional capital for hard money projects. Additionally, many hard money brokers will maintain ongoing relationships with real estate entrepreneurs that frequently need this type of financing in order to complete their real estate projects and engage in similar business activities. In some cases, the hard money broker may actually use some of their own funds to generate income from direct closing costs as well as interest fees after they establish a substantial client base.
As it relates to threats, there’s really nothing that would impact the way that these companies do business at this time. However, with the advent of the Internet and rapidly changing legislation as it relates to mortgage financing – there may be some additional regulatory frameworks that may need to be addressed as a hard money broker expands their business operations. A real estate bubble or economic recession could also impact the way these companies do business given that there would be fewer available projects that will require hard money.
A hard money broker marketing plan should be developed so that potential investors as well as potential borrowers can be sourced very quickly. One of the ways these businesses frequently source their investors and borrowers is to the use of the Internet. These days it’s imperative that any lending business maintains an expansive portal that showcases the loans available to customers as well as the programs that are available for investors who want to earn above rate market returns on their capital. Again, one of things that need to be addressed when developing a proprietary website for a hard money broker is that all laws regarding lending must be addressed and disclosed on the website. An attorney that has an understanding of and all marketing with. Many hard money brokers also maintain profiles on popular social media networks such as LinkedIn, FaceBook, Google+, and twitter. These relationships can assist a hard money broker with obtaining the very valuable leads among real estate borrowers that are looking to complete projects.
Owning and operating a hard money brokerage business can be extremely rewarding not only professionally but from a financial standpoint as well. They provide a very important service to the general public give so financing terms allow individual real estate investors as well as developers to complete profitable projects without having to go through the extensive process traditional mortgage loan. The demand for this type of borrowing is not expected to wane anytime soon, and the demand for these services will always be strong in any economic climate.