Hard Money Loans for Rental Property in California
Hard Money Loans for Investment Property
California Hard Money Direct is a trustworthy and experienced investment property lender providing rental property loans and investment property loans exclusively in California. We are based in Los Angeles and provide real estate investment loans throughout the entire state of California. We have over a decade of experience and a reputation for delivering results – not simply promises.
California Hard Money Direct has built a trusted reputation by delivering results. We have the experience, knowledge, and resources to quickly approve and fund investment property loans in California. As a direct lender, our rates are very competitive and our customer service is superior.
California Hard Money Direct is a direct hard money lender. Working with us means you have successfully cut out the middleman. We provide fast investment property loans in Los Angeles, San Francisco and the surrounding Bay Area, Orange County, San Diego, Riverside, Ventura, San Bernardino, Sacramento and more. Contact California Hard Money Direct today and speak directly with the loan officer. We make financing investment property in California uncomplicated and fast.
Financing Investment Properties With Quick Turnaround Times
When it comes to real estate investing, timing is everything. Savvy real estate investors understand there is no point in seeking out a bank loan when looking for a quick closing. As such, hard money lenders are their number one choice. We understand the unique requirements and how important closing in a timely fashion is.
In many instances, there are multiple backup offers. Hard money investment property lenders are asset-based. The main concern is the value of the property relative to the borrower’s equity in the property. No tax returns are required and no proof of income. Taking all this into consideration, it makes sense real estate investors prefer financing investment properties with hard money lenders.
Interest Rates for Investment Properties
There is not a one-size-fits-all when it comes to interest rates. Loan rates will vary based on varying factors. To name a few, location, loan to value length of loan, condition of the property and experience of the borrower. They will always be higher than a traditional lender. In many instances, banks are not even interested in providing funding for investment properties. They focus most of their interest on owner occupied home mortgages.
Requirements for Investment Properties
In contrast to banks and credit unions, Hard money lenders generally have very few investment property loan requirements. The following are some the most common requirements:
- Hard money lenders will almost certainly make the loan if some basic criteria are met. The philosophy is very different than working with a bank or credit union. Banks seem to look for reasons to say no whereas hard money lenders are simply looking for loans that make sense.
- The most important thing is skin in the game. Since the hard money lender is taking a greater risk, they ask for a larger down payment than a bank would. If you put up 30% or 35% hard money lenders become more confident you will not, simply walk away when times get tough.
- The deal needs to make sense. If you’re buying a rental property and the expected rent is $2800 per month yet your monthly payment to the hard money lender is going to be $3500 per month, the scenario would be looked upon as a losing proposition. The hard money lender would frown upon a transaction such as this. They would question why somebody would choose to buy a property causing a $700 loss every month. This would be a good reason for the hard money lender to reject the loan.
- Making good on the loan if the renter moves out. The hard money lender is not interested in making the loan to somebody unable to carry the property should the tenant move out. It does not make sense to make a loan to somebody if they cannot carry the property for a specific number of months in a downturn. Hard money lenders do not want to end up owning any of the properties they make loans on. Therefore, they are not interested in putting a borrower in a position to fail. They are significantly more interested in protecting the borrower from potentially getting involved in something that simply does not make good financial sense.
- Getting out of the loan when the balloon is due. You will hear the term “exit strategy” this means, there will come a time to exit the loan at the end of the specified term. Hard money lenders want to know what the borrower expects their exit strategy will be. Will they be refinancing the property, selling the property? Or do they make enough income where they can simply pay off the loan in its entirety with money derived from their own resources?
Hard Money Rental Loans Close Much Faster
In contrast with bank loans which can take 60 days up to 120 days to close, direct hard money lenders can close in 7-9 days. When a buyer is convinced the property they are purchasing stands to make them good profit they are not willing to lose the deal by waiting around for bank financing. As such, they will seek out hard money lenders so they can get their deals close quickly. Once they own the property, they can refinance to a lower interest rate loan. In the real estate market where there is a lot of competition this is a very commonly used strategy. If the market is super competitive, borrowers will buy the property for cash. They will come to us immediately after that requesting a cash out refinance.
Sellers are attracted to cash buyers and buyers utilizing hard money financing. When there are multiple offers, the seller will always pick the best offer. It is extremely unlikely a seller would pick a borrower needing bank financing. If it is a cash offer obviously that would be the best. Secondly, if it is pre-approved with a hard money lender it is considered a very desirable offer. Sellers are fully aware, banks are known for making borrowers jump through hoops. Hoop jumping is made even worse, If there is anything the bank deems as unfit about the property. Hard money lenders don’t, particularly care. And then let us not forget, the speed at which hard money lenders can close the transaction. A 7-9 day close is a lot more appealing to a seller than a 90 to a 120 day close with a bank.
Using a Hard Money Loan to Buy Rental Property
The time it takes to complete a rental property loan utilizing a traditional lender can take months and at the end may be declined. Getting a rental property loan from a hard money lender can be fully completed within days. Our pre-approval process takes hours. Borrowers use hard money loans for rental properties to get the property off the market fast. The goal is to get it in escrow, get it closed and keep it away from any people trying to buy the same property. In other words, lock it up in your name as fast as you can. Once the property has been transferred into your name you can take your time and shop for a longer-term loan lesser expensive option.
In any given week we get calls from borrowers in need of emergency loan closings. They wasted precious time with a traditional lender only to find out they were declined. At this point, they have signed off on all their contingencies and are at great risk of losing their earnest money deposit. Typically, when we get calls from borrowers this late in the game, their loan file has everything we could possibly need including an appraisal. Taking over a file like this makes closing the loan in a matter of a few days easy to do. After they acquire the hard money loan, they can work diligently on fixing whatever issue prevented them from getting the conventional loan they were seeking in the first place. Once they remedy their issues they can get a lower interest rate bank loan refinance.
Hard Money Lenders for Investment Property in California
At California Hard Money Direct, we can help you invest in property almost anywhere in California, with fast pre-approvals and impressively low rates.
Financing Requirements For Rental Properties Using Hard Money Lenders
Rental property financing utilizing a hard money lender will require a larger down payment than traditional lenders. Down payments can range anywhere from 25% up to 35% on average. The down payment is the main criteria hard money lenders are looking for. It is a simple philosophy when you think of it. Hard money lenders are confident if a person is willing to put up a large down payment, the likelihood of them defaulting becomes dramatically minimized.
Keep in mind, the hard money lender does not want to see the borrower fail. They will require the borrower have reserves in their bank account to cover any unforeseen matters should they arise in the future. These are important items in the eyes of a hard money lender. They will overlook past issues such as foreclosures, short sales, bankruptcies, and other credit issues. The issues stopping banks from making loans will not stop a private lender from providing investment loans for rental property.
In many cases if a borrower doesn’t have enough down payment, they may be able to pull cash out of one of their other investment properties. A quick analysis of loan to value will determine how much cash can be taken from one or more of the borrowers existing real estate portfolio. We may structure it as a stand-alone refinance, or it might be done as a blanket loan.
Hard money loans are typically considered nothing more than a short-term solution. They are not intended to be long-term loans. The longest term would typically be 48 months. In some circumstances, 60 months.
Real Estate Investment Loans
California Hard Money Direct can facilitate just about any real estate investment loan that makes sense. We have been assisting real estate investors in California for close to a decade. The most popular to date are investment property purchase loans and refinance loans. Second to that would be an investment property rehab loan. These are considered the most sought after and typically the most lucrative.
Real Estate Investor Financing
The main requirement for obtaining real estate investor financing is having sufficient funds for a down payment or equity in an existing property. A down payment of at least 25-30% is generally required for real estate investment financing. For refinancing existing real estate investments, the borrower will need to maintain equity of at least 30% (allowing a cash out up to 70% of the value of the property.) If the borrower does not have enough down payment there may be other options. It is very common for hard money lenders to help borrowers get cash out of their other properties. If the borrower has enough equity in one or more of their other properties, taking cash out to make up the shortfall of the down payment is a great option. Doing so will allow them to capitalize on the new rental property purchase.
Rental Property Financing-Rental Property Loans
Most often, when you meet people who have amassed great wealth you will typically find real estate is a huge part of their success. Rental properties have and will continue to be one of the most popular forms of real estate investing. Investors look for rentals that will bring in more rent than the monthly liabilities. Much of this depends on purchase price, down payment, and the amount of rent the property is generating. There are also tax benefits. The real estate investor can take advantage of tax benefits in the form of depreciation and other considerations.
Investment Loans For Residential Properties
Borrowers have choices when it comes to residential real estate investments. Choices include condominiums, apartment buildings, multi family property such as duplex, triplex, Fourplex etc. And of course, single-family residences. Loan to value ranges depending on property types as well as location. LTV ranges from 65% to 70%. Loan terms can go to 48 months or in some instances 60 months. Interest rates for real estate investor loans from hard money lenders are generally in the range of 8%-9.9% for 1sts. Rates for 2nds are higher. They typically range from 9.9% to 11%. It is a wildly accepted fact, Real estate investment loan rates from private money lenders will be higher than interest rates available from traditional lenders. Borrowers fully understand this and still choose private money when they’re looking for speed and easy underwriting in general.
Low Rates for Investment Properties
Interest rates offered by private money lenders for real estate investment loans will always be higher than traditional lenders like credit unions or banks. They range dependent on so many different factors it would be hard to quote an exact rate without a scenario. Generally speaking, they range from 8% to 9.9% for 1st mortgages. 2nds are a higher risk to the investor and will be priced higher accordingly. On average they range from 9.5% to 11.5% interest.
California Hard Money Direct can assist real estate investors capitalize on equity they may have in one or more properties. Investment property refinance loans are utilized most in order to better leverage real estate gains. California hard money direct can assist you with refinance loans for investment properties as well as cash out refinance investment property loans. The process is quick. The speed allows investors to capitalize on investment opportunities that may otherwise be missed when working with traditional lenders. Some of our investors fortunate enough to have been involved in real estate for years have substantial equity. Rather than letting the equity sit there, savvy investors put the equity to work. As such, cash out refinance rental property loans are a highly sought-after way to quickly access the equity in one or more properties to invest in additional real estate.
Rehabbing Investment Property
There seems to be a bit of confusion when it comes to investment property rehab loans or fix and loans. The misconception is, thinking the lender is going to finance the property in its entirety along with the rehab money. This structure would be an extraordinarily risky venture for the investor and one that California Hard Money Direct would not be interested in. However, we have many real estate investors coming to us with 30% down or 35% down plus the rehab money. They utilize our services for the remaining 65% or 70% of the purchase price. Doing it this way allows the real estate investor to control their rehab money rather than a lender putting it in fund control. Once it is in fund control the investor is no longer in the driver seat. Rehab loans are exceedingly popular because they can generate excellent profits in a short amount of time.
Not every investor is interested in quickly fixing and selling. A very popular long-term strategy would be fix and hold loans. This allows investors the opportunity to purchase property, rehab the property and then rent the property either long-term or as a vacation rental for short-term stays. The loan terms are also different. An investment property rehab loan would most commonly have a 12-month loan term. In contrast a fix and the hold loan would have a term up to 48 months.
|Investment Property Loans Program|
TIME TO FUND LOAN
As few as 7-9 days if needed
$50,000 – $20 Million
12 months to 36 months with longer terms available
1sts & 2nds
LOAN TO VALUE (LTV)
1sts: Up to 70% of current value -- 2nds: Up to 65% CLTV
LOAN APPLICATION APPROVAL TIMELINE
Same day pre-approval available
Commercial, mixed use, single family, multi-family & industrial
PURCHASE LOAN INTEREST RATES & POINTS
Please contact us for information on current rates and points.
Why More Borrowers Choose California Hard Money Direct for Hard Money Rental Loans?
Work with a lender that has the resources, knowledge and experience to get your deals closed quickly. Cut out the middleman and partner with a Direct Hard Money Lender.
Same day pre-approvals. Most loans can be funded within 7-9 days.
Our interest rates and fees for hard money loans are among the lowest in the industry. Call now and compare for yourself.
We don’t need to toot our own horn when it comes to the discussion regarding satisfied customers. Check out our Google reviews from brokers, realtors and norrowers and you will quickly learn why California Hard Money Direct has so many clients repeatedly using our services for all their hard money needs.
Call today and speak directly with a loan officer. We will listen carefully to your scenario. Once we know the details, we will let you know right away exactly how we can assist you.
Recently Funded California Hard Money Loans for Investment Property
Read what other borrowers have to say about working with our Hard Money Lenders for Investment Property
I sincerely enjoy the high level of commitment and passion Judy brings to the table during the loan process. From the first day we spoke on the phone through the day the loan was financed, Judy was with me. She responded to any questions I had thoroughly and promptly. If need arises, I would use Judy again. Also, I would highly recommend Judy to anyone that seriously needs funding for investments and flips.
Judy is the type of person who follows through and moves FAST. She was also very sweet and a pleasure to work with. I would recommend California Hard Money Direct for anyone in need a quick loan to finish a project. They were a great resource for me.
Thank you Judy for all of your help. Judy is an amazing broker, she is very helpful throughout the process. She is quick and is very Organized. Judy knows her stuff…. and will not drag you along the process… Its either she can do it or not. … I will continue to come back, Thank you Judy.