Borrowers FAQ`s
Q: What is Hard Money?
A hard money loan is asset-based, meaning the loan is considered primarily on the value of the hard asset (usually real estate) rather than on the borrower’s qualifications (income and credit). A hard money loan has many advantages, and obtaining a hard money loan is faster and easier than traditional financing, eliminating most of the red tape!
Q: What is your loan process?
Getting started usually starts with getting a property under contract. Then fill out our Quick Loan Application and we'll take it from there! Our Loan Process diagram takes you through all the steps of securing a hard money loan from The Investor's Source, from the initial contact, to pre-approval and approval, to closing
Q: Where do you lend?
We currently lend on properties throughout Colorado and Wyoming.
Q: What type of loans do you and don’t you finance? Do you lend on Mobile Homes?
The Investor’s Source makes a variety of real estate loans, including land and new construction, single and multi-family properties, land development, and commercial buildings - all with or without rehab needs. We will lend on purged, stamped, double-wide mobile homes, and mobile home parks. In general, we do not lend on vehicles and equipment.
Q: Do you make loans on owner-occupied properties?
We only make owner-occupied loans for business purposes like real estate investing, not for purchase. If you are interested in exploring lease-purchase creative financing for an owner-occupied property you can call us to discuss.
Q: Are your loans based on the property alone or on my qualifications as well?
Primarily our loans are based on the property and your liquid reserves. However, your income, assets, liabilities and credit are reviewed to determine your ability to pay existing debts. Things like bankruptcies and foreclosures and current liens or judgments will be factored into an approval decision, but none of them alone would necessarily disqualify you. When we review projects, we use common sense and look at your overall financial profile, experience as an investor, reserves, and income to support the loan.
Q: How often do you pull my credit?
In general, if you are doing multiple real estate loans with us, we only pull credit every year and have you pull your own credit every 3 months. In certain circumstances, we may require a more recent credit report.
Q: Do I need to get pre-approved prior to making an offer?
No. Once you have located a property, make your offer and get the property under contract. Then fill out and submit the Quick Loan Application for your real estate loan. We will get back to you within 48 hours with a pre-approval decision and terms sheet. When the property’s value and all underwriting is confirmed, we will provide final approval
Q: What if I Need a "Proof of Funds" letter to make an offer?
Fill out our Quick Loan Application first, check the box marked “Proof of Funds Letter Required,” and provide the minimal documentation required. Once that is received and the deal makes sense, we will provide you with the Proof of Funds letter the same day.
Q: How fast can you close?
Once we receive your real estate loan application, purchase contract, Broker Price Opinion or Appraisal, and supporting documentation we can usually close within 10 business days - often sooner. Depending on our schedule, we can also do "rush closings" (5 business days or less) which may involve additional origination fees.
Q: What are your terms, fees and interest rates?
Most of our real estate loans are 6 to 12 months. Rates change depending on market conditions. Our standard rates in the Front Range (Fort Collins to Colorado Springs) are 3 points (3%) and 12% interest. An additional point will apply to loans originated outside of the Front Range. We do offer periodic specials and discounts for repeat borrowers. Check our Rates and Terms to get the most current information.
Q: What is the payment structure?
Most of our real estate loans are structured as monthly interest-only payments with a balloon payment at maturity.
Q: Does The Investor’s Source charge prepayment penalties?
We never have prepayment penalties. However, on a 12-month loan, if you can guarantee all 12 months of interest payments, we can often decrease your interest rate.
Q: Will The Investor’s Source take a second position or allow second mortgages on my rehab project?
Most of our real estate loans are made in the 1st lien position, meaning the lender is the first person to benefit from a liquidation. In certain cases, when there is sufficient equity in the property, we will make 2nd position loans. Our loans do not allow subordinate financing without the lender’s approval.
Q: Can closing costs, rehab and monthly payments be rolled into the loan?
Our goal is to get your deal negotiated for as little cash out of pocket as possible. Many of our real estate loans covers 100% of the rehab costs and some or all of your closing costs and interest payments as well. First or second-time borrowers should expect to put some “skin in the game,” and sponsors for larger commercial real estate and construction projects are generally required to put down a minimum of 10% of the total cost of a project.
Q: If repair funds are needed, how is the repair escrow funded?
The Investor’s Source will fund up to 100% of the repairs up to the maximum ARV. Any shortage must be funded by the borrower at closing. All funds, including repair funds needed to close, are kept in a repair escrow account.
Q: How is the escrow money paid out?
Escrow money is paid out using your approved construction/rehab budget, and it will be paid out in draws. To release a draw you will need to submit a draw request form, receipts/invoices, lien waivers and photos of the work completed. Once approved, funds will be ACHed to you and checks cut to your contractors. The final draw will require a CO and final lien waiver.
Q: Will you refinance a property that I currently own and/or extend a loan I have with The Investor’s Source?
Yes, we will refinance a non owner-occupied loan. Most of our real estate loans come with a built-in paid extension provision. We also often re-extend loans depending upon your payment history and market conditions.
Q: Can I take title in the name of my LLC or corporation?
Yes, title may be taken personally or in the name of a validly formed and existing entity. The Investor’s Source will require a personal guarantee on loans closed in the name of the entity.
Q: Do you use your own funds or funds from private lenders?
Most of our larger loans are funded by our pooled lending fund, The Investor’s Source Private Lending Fund #1, which currently has the capacity to fund loans up to $5M. We have our own funds available for smaller loans that need to be funded very quickly. We also have a broad base of private lenders, each who have unique lending parameters to fund the variety of real estate loan requests we receive.
Q: Can you provide me with a Non-Recourse Loan that I can use to invest with my Self-Directed IRA/401K?
Yes, we make non-recourse loans required by the IRS when using self-directed retirement accounts to buy real estate. These loans can supplement and leverage your own self-directed retirement funds to increase your real estate purchasing power.
Q: How does your Transactional Funding work?
When you buy and resell a property at the closing table (i.e. “double” or “simultaneous” closing) we can provide the funds for one or both sides of the transaction. Learn more about our transactional funding and how it can benefit you!
A hard money loan is asset-based, meaning the loan is considered primarily on the value of the hard asset (usually real estate) rather than on the borrower’s qualifications (income and credit). A hard money loan has many advantages, and obtaining a hard money loan is faster and easier than traditional financing, eliminating most of the red tape!
Getting started usually starts with getting a property under contract. Then fill out our Quick Loan Application and we'll take it from there! Our Loan Process diagram takes you through all the steps of securing a hard money loan from The Investor's Source, from the initial contact, to pre-approval and approval, to closing.
Q: Where do you lend?
Q: What type of loans do you and don’t you finance? Do you lend on Mobile Homes?
We currently lend on properties throughout Colorado and Wyoming.
The Investor’s Source makes a variety of real estate loans, including land and new construction, single and multi-family properties, land development, and commercial buildings - all with or without rehab needs. We will lend on purged, stamped, double-wide mobile homes, and mobile home parks. In general, we do not lend on vehicles and equipment.
Q: Do you make loans on owner-occupied properties?
Q: Are your loans based on the property alone or on my qualifications as well?
We only make owner-occupied loans for business purposes like real estate investing, not for purchase. If you are interested in exploring lease-purchase creative financing for an owner-occupied property you can call us to discuss.
Primarily our loans are based on the property and your liquid reserves. However, your income, assets, liabilities and credit are reviewed to determine your ability to pay existing debts. Things like bankruptcies and foreclosures and current liens or judgments will be factored into an approval decision, but none of them alone would necessarily disqualify you. When we review projects, we use common sense and look at your overall financial profile, experience as an investor, reserves, and income to support the loan.
Q: How often do you pull my credit?
Q: Do I need to get pre-approved prior to making an offer?
In general, if you are doing multiple real estate loans with us, we only pull credit every year and have you pull your own credit every 3 months. In certain circumstances, we may require a more recent credit report.
No. Once you have located a property, make your offer and get the property under contract. Then fill out and submit the Quick Loan Application for your real estate loan. We will get back to you within 48 hours with a pre-approval decision and terms sheet. When the property’s value and all underwriting is confirmed, we will provide final approval
Q: What if I Need a "Proof of Funds" letter to make an offer?
Q: How fast can you close?
Fill out our Quick Loan Application first, check the box marked “Proof of Funds Letter Required,” and provide the minimal documentation required. Once that is received and the deal makes sense, we will provide you with the Proof of Funds letter the same day.
Once we receive your real estate loan application, purchase contract, Broker Price Opinion or Appraisal, and supporting documentation we can usually close within 10 business days - often sooner. Depending on our schedule, we can also do "rush closings" (5 business days or less) which may involve additional origination fees.
Q: What are your terms, fees and interest rates?
Q: What is the payment structure?
Most of our real estate loans are 6 to 12 months. Rates change depending on market conditions. Our standard rates in the Front Range (Fort Collins to Colorado Springs) are 3 points (3%) and 12% interest. An additional point will apply to loans originated outside of the Front Range. We do offer periodic specials and discounts for repeat borrowers. Check our Rates and Terms to get the most current information.
Most of our real estate loans are structured as monthly interest-only payments with a balloon payment at maturity.
Q: Does The Investor’s Source charge prepayment penalties?
Q: Will The Investor’s Source take a second position or allow second mortgages on my rehab project?
We never have prepayment penalties. However, on a 12-month loan, if you can guarantee all 12 months of interest payments, we can often decrease your interest rate.
Most of our real estate loans are made in the 1st lien position, meaning the lender is the first person to benefit from a liquidation. In certain cases, when there is sufficient equity in the property, we will make 2nd position loans. Our loans do not allow subordinate financing without the lender’s approval.
Q: Can closing costs, rehab and monthly payments be rolled into the loan?
Q: If repair funds are needed, how is the repair escrow funded?
Our goal is to get your deal negotiated for as little cash out of pocket as possible. Many of our real estate loans covers 100% of the rehab costs and some or all of your closing costs and interest payments as well. First or second-time borrowers should expect to put some “skin in the game,” and sponsors for larger commercial real estate and construction projects are generally required to put down a minimum of 10% of the total cost of a project.
The Investor’s Source will fund up to 100% of the repairs up to the maximum ARV. Any shortage must be funded by the borrower at closing. All funds, including repair funds needed to close, are kept in a repair escrow account.
Q: How is the escrow money paid out?
Q: Will you refinance a property that I currently own and/or extend a loan I have with The Investor’s Source?
Escrow money is paid out using your approved construction/rehab budget, and it will be paid out in draws. To release a draw you will need to submit a draw request form, receipts/invoices, lien waivers and photos of the work completed. Once approved, funds will be ACHed to you and checks cut to your contractors. The final draw will require a CO and final lien waiver.
Yes, we will refinance a non owner-occupied loan. Most of our real estate loans come with a built-in paid extension provision. We also often re-extend loans depending upon your payment history and market conditions.
Q: Can I take title in the name of my LLC or corporation?
Q: Do you use your own funds or funds from private lenders?
Yes, title may be taken personally or in the name of a validly formed and existing entity. The Investor’s Source will require a personal guarantee on loans closed in the name of the entity.
Most of our larger loans are funded by our pooled lending fund, The Investor’s Source Private Lending Fund #1, which currently has the capacity to fund loans up to $5M. We have our own funds available for smaller loans that need to be funded very quickly. We also have a broad base of private lenders, each who have unique lending parameters to fund the variety of real estate loan requests we receive.
Q: Can you provide me with a Non-Recourse Loan that I can use to invest with my Self-Directed IRA/401K?
Q: How does your Transactional Funding work?
Yes, we make non-recourse loans required by the IRS when using self-directed retirement accounts to buy real estate. These loans can supplement and leverage your own self-directed retirement funds to increase your real estate purchasing power.
When you buy and resell a property at the closing table (i.e. “double” or “simultaneous” closing) we can provide the funds for one or both sides of the transaction. Learn more about our transactional funding and how it can benefit you!
Interested in Real Estate Investing?
We specialize in investor-friendly deals that benefit both borrowers and lenders. Investing with The Investor’s Source can help you diversify your portfolio, grow your wealth, and support projects that transform Colorado and Wyoming communities.