Location
Is the property in the lender's target area or in an area the lender understands? Is it easy to evaluate the property because there are similar properties in the immediate area? Are there issues with respect to access, visibility, fire protection, utilities, etc. Would the lender be comfortable owning and managing a property in that location in the event the borrower defaults and the lender forecloses? Much of the time the lender's assessment of the location is subjective based on past experience.
Value
Being able to determine the current value of the property is, of course, vital. "Current" is the operative word when it comes to value today. What the property was worth two years ago or will be worth once the real estate market rebounds is of no import to a hard money lender today. What will the property sell for tomorrow is the question they are looking to answer. Assistance from appraisers and real estate brokers may be used to aid in determining value or confirming the the in-house opinion.
Type
No hard money lender is equally comfortable with every type of real estate. Each has a bias based on past experience , the current real estate environment and/or advice from other industry professionals. That doesn't mean they won't make a loan on a property type with which they are less familiar. They will just be conservative when they do so - possibly more conservative than another lender who is more familiar with that type of real estate.
Marketability
How quickly can the property be sold if need be? Would a quick sale achieve a price sufficient to retire the loan in full? How long would the property need to be on the market to maximize the value?
Environmental Issues
Are there hazardous materials on the property or indications that hazardous materials may be present? This is of particular concern when dealing with older properties or properties where former occupants were likely to have used hazardous materials. A Phase I Environment Site Assessment made need to be ordered to determine the extent of the issues.
Title Issues
Does the borrower have title clean to the property? Are there liens, easements, use restrictions or other title issues that the lender would find objectionable? All lenders will require a lender's title policy be issued by a credit-worthy title insurance company effective on the closing date.
Income
Does the property generate any income that will be used to service the loan. What is the certainty of that income during the loan term?