It looks like a hard money outfit. I have some experience dealing with hard money lenders and it’s not what a lot of people think. This type of lender is pretty nuts-n-bolts. They don’t sell loans off or package them as MBS or CDO instruments, they hold and service those loans like a portfolio lender. Because they have to live with their loans they have zero tolerance for risk, at least the ones I’ve known are like that.
Forget 90% or 80% LTVs, hard money lenders operate in the 50% range and if they really like the property or the borrower they might offer as much as a 75% LTV. They rely on real credit and income verifications and they charge hefty interest rates. They are the lenders of last resort and they don’t mess around.
The fortunes of the hard money and the more conservative tier of portfolio lenders traditionally run in opposition to those of the conventional lenders. When times are good and credit is cheap-n-easy these guys don’t do very well because everyone has options and because their criteria are so tough they can’t compete. OTOH when times are tough and the conventional lenders are taking losses these guys do quite well.
You would still want to be real careful about checking out a hard money lender before investing money with them, though. The potential is there for a upstart hard money lender to operate a Ponzi setup. However, if you were dealing with a group that’s been around for a while and you could identify a track record of them actually financing properties over several years it might be a reasonable bet.
