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How Many Hard Money Loans Can You Have At Once?

Understanding the dynamics of a hard money loan is crucial for borrowers.

One common question is: How many hard money loans can you have at once/or simultaneously?

The answer varies depending on several factors.

Lender’s Perspective on Multiple Hard Loans

Every lender has their own requirements regarding how many loans they will make to one borrower at the same time.

Lenders view multiple loans to the same borrower as a greater risk.

If the borrower can’t handle the number of projects they have, they may not be able to complete the projects or meet their financial obligations.

This increases the risk of default, as the borrower could default on all of their projects, leaving the lender with multiple bad loans.

Loan Amount vs. Number of Transactions

Some lenders focus on the total amount of funding they will allow one borrower to utilize.

For instance, they may approve loans for amounts ranging from $500,000 to $25,000,000.

The exact number of transactions covered by this amount doesn’t matter as long as it stays within their approved limit.

On the other hand, other lenders prioritize the number of transactions.

They might set a limit on the number of loans, such as one or five, to ensure that the borrower can manage and complete all projects.

This strategy aims to minimize the risk of default and potential loss.

Borrowing from Multiple Hard Lenders

Another aspect to consider is the number of loans a borrower might have with different hard money lenders.

It’s not uncommon for borrowers to tap into multiple funding sources, potentially having ten loans spread across three different lenders.

As you might expect, this is seen as a higher risk due to the sheer number of open transactions.

Factors Influencing Loan Limits

Several factors can influence a lender’s decision on how many loans they’ll grant to a single borrower:

  • Borrower’s experience level
  • Type of deal
  • Loan amount
  • LTV (Loan to Value) and LTC (Loan to Cost) ratios
  • The complexity of the project

Conclusion: A Mix of Factors Determines Hard Money Loan Limits

Most hard money lenders use a combination of the factors mentioned above to decide on the number of loans they’ll offer to a borrower.

Generally, a borrower with more experience, a successful track record, and substantial funds are likely to secure more loans.

Want to know more? Looking for your 1st hard loan or an additional one? Then please get in touch, even if it is just for a chat – 817-200-7575 or Fill In Our Application Form.

Further Reading & Learning:

Hard Money Loans – Do They Appear On Your Credit?

Is Insurance Needed For Hard Loans?

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