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Hard Money Lending Software: How To Pick The Best Solution

May 13, 2024

Zach Cohen

Who Is This Hard Money Software Review For?

This guide is designed for Real Estate Hard Money Lenders currently assessing software solutions to assist in managing and expanding their businesses. There are two typical profiles of hard money lenders seeking software: The Launch Class and Scale Class.

  1. Launch Class: Launch class hard money lenders are typically small businesses handling their first 10-50 loans. Whether you're using your own funds, you started a fund recently, or you syndicate loans to investors, you're at the stage where automating origination and servicing processes and increasing deal volume is a priority. This article will cover the essential considerations for this class of Hard Money Lending business.
  2. Scale Class: The “Scale Class” of hard money lenders represents small to medium-sized businesses with validated business models, steady deal flow, and access to investment capital. These lenders are considering expanding their origination teams and scaling their back-office operations to attract more institutional capital. This article will address the crucial considerations for this class of hard money lender.

Why Is Hard Money Lending Unique?

Hard money lenders face unique challenges compared to other real estate lenders such as:

  • Managing the entire loan life cycle (Origination, Servicing, and Capital markets)
  • Prioritizing time and efficiency, which are crucial compared to conventional lending, making efficient systems paramount.
  • Meeting the expectations of recurring clients who anticipate a better experience with each interaction.
  • Dealing with various asset types and loan structures requires flexibility and customizability.

Due to these unique requirements, many lenders resort to piecing together multiple solutions to meet their diverse needs.

What Is Hard Money Lending Software?

Hard Money Lending Software refers to the entire suite of software used to manage a hard money lending business. While most sites describe it as Loan Origination Software (LOS), the best hard money lending software handles origination, servicing, and investor management functions.

Main Features of Hard Money Lending Software

For both Launch and Scale class hard money lenders, crucial features to expect from your software include:

  1. Accurate Interest Rate and Payment Calculations: Ensure your software can handle mid-period rate and principal changes for accurate calculations.
  2. Designed For Fix and Flip, Rental, and GUC Loans: Your software should cater to various loan types, including fix and flip, rental, and ground-up construction (GUC), with features for managing rehab and construction draws.
  3. Checklists: Streamline processes with checklist features for reviewing loan-related documents, improving efficiency and reducing errors.
  4. Internal Team Communication: Look for features facilitating internal messaging, task assignments, and progress tracking to enhance team collaboration.
  5. Document Generation: Ensure your software offers customizable templates for generating various loan related documents.
  6. Automated Payment Collections: Streamline payment collections with automated scheduling, reminders, and integration with payment processing systems.
  7. Fund Management: Opt for software which provides tools for managing pooled investment vehicles. Whether you have a fund or not, it is likely that at some point you will consider starting a fund for your lending business.
  8. Custom Reporting: Make sure your software allows you to build your own reports with specific filters like region, loan amount, interest rate, etc.
  9. Investor Portal: Offering a professional investor portal to your investors is one of the most effective ways to separate your business from competitors. Your hard money lending software should include a portal for your investors.

Best Hard Money Lending Software

The best hard money lending software is Baseline. Baseline stands out for connecting the four main segments of your hard money lending business: Point of Sale, Origination, Servicing, and Investor Management.

Some standout features of Baseline include:

  • UX/UI: Baseline leads the Real Estate Private Lending industry in design, ensuring exceptional ease of use, navigation, and learning.
Term Sheet Generation Software Snapshot
  • Capital Raising: Baseline provides a comprehensive investor portal for offering full reporting to investors and presenting deals and funds directly to your investor base.
Private Loan Investment Offering Software
  • Payment Collections: Baseline allows seamless payment processing directly through the system, eliminating the need for manual check collection or NACHA file uploads with your bank.
Automated Payment Processing Software Snapshot

Interest In Learning More?

Baseline is specifically designed for small and medium sized hard money lenders looking to scale their businesses.

Get a demo here.

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