Invest In Hard Money
Hard Money Loans: A Low Risk High Return Investment for Sophisticated Investors
“Don’t work for your money make your money work for you.” This mantra and our 50 plus years of real estate experience are two of the reasons why Fulford Lending is one of the leading hard money lenders in the DMV area (Washington D.C, Maryland, Virginia). We want our money, and that of our fellow investors working, earning high returns with minimal risk.
Hard money borrowers typically pay interest rates from 10% to 15% with 2-5 points as an origination fee. For example a twelve month interest only balloon note with an interest rate of 11% and 3 points charged at origination provides the lender a 14.43% return. This return can actually be higher if the lender reinvests the interest payments during the life of the loan. These excellent returns look even better when compared to other conventional investments. As of September 2019 the highly volatile Dow Jones has only returned around 3.5% over the past 12 months . While Bank CD rates are just topping 2.5%. However, any potential investment must be evaluated not only by its potential return but also by its potential risk.
Hard money loans are secured by deeds of trust on real estate. The deed of trust allows a lender to foreclose on the underlying property if a borrower defaults. A hard money lender’s risk is minimized to the extent that it can potentially recover the loan principal and any interest and costs thereon from the secured property at foreclosure. A way to calculate the ability to recover these amounts from a particular property is loan to value ratio (“LTV”). LTV is the ratio of the loan amount over the property’s fair market value. A $60,000 loan secured by a property worth $100,000 would have an LTV of 60%. Fulford Lending’s LTV’s are always under 65% and typically under 50%. This equity cushion is what minimizes a hard money lender’s risk. When calculating LTV’s and estimating risk it is extremely important to have an accurate fair market valuation of the property. An important factor in obtaining accurate valuations is knowledge of the underlying real estate market.
Fulford Lending in the DVM Area
Fulford Lending is a market leading hard money lender with a focus on loans secured by real estate located in the Washington, DC, Maryland, and Virginia area. We have been actively involved in all aspects of the DMV real estate market since the late 1980’s. This market experience and our thorough understanding of real estate values and rental values give Fulford Lending a significant edge in underwriting loans in the DMV area. We also focus on the DMV because of it’s economic strength. Ten of the twenty-five richest counties in the United States are part of the greater Washington, DC metropolitan area. This economic strength helps minimize risks during down turns in the broader US real estate market.
How do I get Involved?
Fulford Lending provides investors two ways to invest in hard money loans. Investors can invest through whole trust deeds and/or through a managed note fund. Whole trust deeds allow an investor to have complete ownership and control over a hard money loan. The note fund allows an investor to diversify risk by spreading their investment over a large pool of notes. The note fund is managed by Nathaniel S. Fulford who has significant experience in real estate and hard money lending.
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