Hard Money Wholesale Lenders Explained in Detail

Hard money wholesale lenders are specialized financial institutions that provide short-term, high-interest loans to real estate investors and developers. They focus on providing financing for fix-and-flip projects, new construction, and other types of real estate deals.

These lenders offer quick access to capital, often within a matter of days, and typically require a loan-to-value ratio of 70-80%. This allows investors to purchase properties at discounted prices and renovate them for resale.

The interest rates on hard money wholesale loans can range from 12-18% per annum, and fees may include origination fees, closing costs, and monthly servicing fees. This higher cost is due to the lender's higher risk exposure.

Hard money wholesale lenders usually require a down payment of 20-30% of the property's purchase price, and the loan term is typically 6-12 months.

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Hard money wholesale lending is a financing option that's perfect for real estate investors looking to flip properties quickly. It allows them to obtain a loan in a short amount of time, which is beneficial for wholesale flips.

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The process involves applying to a hard money lender, providing information about the property and plans for rehabilitation. Since hard money loans are primarily asset-based, the lender evaluates the property's value and potential after renovations.

Hard money loans are often used for wholesale funding, which can be used instead of contract assignments. This type of funding doesn't allow the buyer and seller to know the lender's financial spread.

Collateral plays a crucial role in hard money lending, with the financed property serving as security for the lender. This provides a safety net for the lender, allowing them to take on more risk than traditional lenders.

Here are some key benefits of hard money wholesale lending:

Hard money wholesale lending often comes with higher interest rates, typically ranging from 12% to 15% with points for some lenders. However, this is a trade-off for the speed and flexibility of the loan.

Hard money wholesale lenders operate in various states, but it's essential to know their geographic scope. Some lenders are available nationwide, while others have specific state-by-state availability.

Easy Street Capital, for example, offers fix and flip loans in all 50 states except Louisiana, Minnesota, Missouri, Nevada, New York, North Dakota, and South Dakota. New Silver, on the other hand, is available in all 50 states except Alabama, Alaska, Idaho, Louisiana, Nevada, North Dakota, Oregon, South Dakota, Utah, and Vermont.

Here's a breakdown of the states where these lenders operate:

In the 48 contiguous states, you can expect fast loan approvals and quick closings. Easy Street Capital's EasyFix loan program provides fix and flip loans for investors purchasing residential properties, with approvals in less than 24 hours and closings in 48 hours - no appraisals!

Easy Street's EasyBuild loan program offers hard money construction loans for developers building residential properties, with approvals in less than 24 hours and closings in 48 hours. This means you can get your project up and running quickly.

New Silver's Fix-&-Flip Loans are also available in the 48 contiguous states, offering streamlined loan approvals, instant term sheets, and fast-tracked closing. You can get approved for a fix-and-flip loan in under 5 minutes, including instant term sheets and instant proof of funds.

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Here are some key loan options available in the 48 contiguous states:

Keep in mind that there are some loan restrictions in the 48 contiguous states, including no 100% financing, no properties with more than 4 units, and no owner-occupied properties.

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Baltimore is a city where local knowledge can make all the difference. We have a Hard Money Lender headquartered in Baltimore, MD, who understands the local market. They take the time to review deals and provide local market insights to ensure profitability and low risk. They're comfortable making fast decisions to price, approve, and fund loans in Baltimore City or Baltimore County.

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Hard money lenders offer a range of loan products to suit different investment strategies. Some popular options include fix-and-flip loans, bridge loans, and construction loans.

These loans can be used to purchase, renovate, and sell non-owner occupied properties up to 10 units, or to refinance existing investment properties for business purposes. Hard money lenders also offer loans for new construction projects, covering the purchase of empty lots to build on, tearing down existing properties to construct new ones, or adding square footage to existing properties.

Loan terms vary, but some lenders offer interest-only payments, no prepayment penalties, and draws processed in 48-72 hours. Here are some key loan options:

Florida's real estate market is a vibrant and attractive place for investors, with rising home prices and a strong demand for rental properties. The median sales price of a home in Florida is currently $375,000, up 23% from the previous year.

Hard money loans offer a unique solution for investors looking to finance their projects. These loans provide short-term, asset-based financing for high-risk real estate, including fix-and-flip projects in Florida.

Ridge Street Capital offers a range of hard money loan options, including 12-month fix and flip loans at 10.75% interest. These loans can cover up to 90% of purchase and rehab costs, making them an attractive option for investors.

Here are some key benefits of hard money loans:

Products can vary among lenders, but some common types include fix and flip loans, bridge loans, and construction loans. These loans are designed to help investors purchase, renovate, and sell properties quickly.

Fix and flip loans can cover up to 90% of purchase plus 100% of rehab costs, and are available for residential investment properties across the US. For example, Ridge Street Capital offers 12-month fix and flip loans at 10.75% with quick online approvals.

Bridge loans are popular among investors needing to close fast, and can be used to purchase-only properties without rehab costs. Sherman Bridge Lending offers bridge loans with competitive rates and swift turnaround times.

Construction loans can be used to build new properties or add square footage to existing ones. HouseMax Funding offers construction loans up to 82.5% LTC, and specializes in fix & flip loans, construction, and rental loans.

Some lenders offer flexible loan terms, such as interest-only payments and no prepayment penalties. For example, Stratton Equities offers interest-only payments and loan terms of 9-24 months.

Here are some key loan terms to consider:

Hard money wholesale lenders provide a fast and adaptable financing option for real estate investors, allowing them to purchase properties and rehab them for resale.

These loans are typically asset-based, with lenders evaluating the property's value and potential after renovations rather than focusing on the investor's credit history. The loan amount is a percentage of the property's estimated after-repair value, and interest rates can range from 12% to 15% with points for some lenders.

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The financed property is collateral, providing security for the lender and allowing them to take on more risk than traditional lenders. This means that if the investor fails to make payments, the lender has the right to take ownership of the asset.

In a fix and flip situation, the loan is only in place while the property is purchased and repaired, with repayment occurring at the time of sale. Interest on the loan starts accruing as of the date of settlement, and the rehab component of the loan will be disbursed to the investor via reimbursement based on draw request or by advancement based on draw schedule.

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Baselane stands out as a top choice for hard money lenders, especially for new investors who value quick capital injections. This responsiveness is crucial for those starting their real estate journey.

Baselane's understanding of unique needs makes it a great fit for new investors. They offer funding for small loans, which can be a game-changer for beginners.

Baselane's reputation is built on swift and efficient funding, making it a reliable option for those who need quick access to capital.

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In Florida, hard money loans are a type of asset-based financing that allows buyers to purchase real estate, including single-family homes and condos.

These loans are typically from private investors or companies called hard money lenders, who are more willing to offer loans to harder to finance projects due to the security of the property.

Interest rates on these loans are often higher than your average home loan, but they offer better access to financing for sometimes hard-to-finance purchases.

Hard money loans tend to be short-term, requiring repayment between 1 and 5 years, unlike mortgages which typically offer loans with 15-to-30-year terms.

In a fix and flip situation, the loan is only in place while the property is purchased and repaired, with repayment occurring at the time of sale.

The value of the property secures the loan, meaning if the borrower defaults, the lender can force the sale of the property through the foreclosure process.

Each hard money lender in Florida comes with their own requirements on underwriting and application details, so it's essential to do your research before applying.

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Hard money lenders offer a range of loan options, including hard money loans, fix and flip loans, and ground up construction loans. These loans can be used for various purposes, such as acquiring a new property or renovating an existing one.

The loan amounts and LTV ratios vary depending on the type of loan. For example, hard money loans can range from $75,000 to $25 million with an LTV up to 80%, while fix and flip loans can range from $75,000 to $10 million with an LTV up to 90%.

Interest rates for DSCR loans are determined by several factors, including LTV, credit score, borrower experience, property type, and institutional credit investor demand.

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A hard money loan is a type of asset-based financing that's secured by real property, typically provided by private investors. This type of loan is considered difficult to acquire.

The interest rates on hard money loans can be high, ranging from 12% to 15%, with points for some lenders. However, this is a trade-off for the speed and flexibility of the loan.

Soft money loans, on the other hand, have below-average interest rates and are generally easy to acquire. They're also secured by real property, but are considered much easier to obtain than hard money loans.

Here's a comparison of hard money and soft money loans:

In the event the borrower fails to make payments, the lender has the right to take ownership of the collateral property. This provides security for the lender, allowing them to take on more risk than traditional lenders.

In Maryland, hard money lenders don't need to be licensed through the NMLS because they provide business purpose loans. Hard money lenders in Maryland can't use a borrower's primary residence as collateral for investment property loans. Hard money lenders in Maryland are not required to register with the state.

Interest rates for real estate investment loans can be complex, but understanding the basics can help you make informed decisions. Hard money lenders, also known as private lenders, offer non-bank loans secured by physical assets, often real estate.

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The interest rates for fix and flip loans can vary, but it's essential to understand the factors that influence them. At OfferMarket, they publish the Fix and Flip Loan Interest Rate Index to provide transparency and help clients compare terms with other lenders.

Interest rates for DSCR loans are determined by several factors, including LTV, borrower credit score, borrower experience, property type, risk-free interest rate, and institutional credit investor demand. These factors can cause interest rates to fluctuate beyond the borrower's control.

Here are the key factors that affect DSCR loan interest rates:

The interest rate for a DSCR loan will be priced based on what the institutional investor determines to be an acceptable rate in exchange for risk. This can result in varying interest rates, even for borrowers with similar profiles.

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Lender fees can be complex and varied, but some fees are more common than others.

The origination fee, also known as "points", is a percentage of the loan amount. At OfferMarket, they typically charge 1 point, but most private lenders charge 2 points.

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Underwriting fees are another common charge, with a common cost of $495. This fee is usually necessary to process the loan application.

A legal or doc prep fee is also standard, with a common cost of $995. This fee covers the cost of preparing and reviewing the loan documents.

Other fees, such as servicing setup, admin, and processing fees, are not always necessary and should be reviewed carefully.

Here are some common lender fees for different types of loans:

It's essential to understand all the fees charged by a lender before making a decision.

Calculating DSCR is a crucial step in evaluating a property's financial viability. There are a few different ways to calculate DSCR, so it's essential to review the options.

The DSCR Calculator can be a handy tool to simplify the process. It's always a good idea to use a calculator to ensure accuracy.

To calculate DSCR, you'll need to know the property's gross income and its annual debt payments. The DSCR Calculator can help you plug in these numbers.

A typical DSCR calculation involves dividing the property's gross income by its annual debt payments. This will give you a ratio that indicates the property's ability to cover its mortgage payments.

The result of the DSCR calculation will be a ratio, not a percentage. For example, if the DSCR is 1.25, it means the property's gross income is 1.25 times its annual debt payments.

Using the DSCR Calculator can help you quickly and easily perform this calculation.

Real estate investing can be a lucrative venture, but it often requires access to capital. Hard money lenders offer short-term, high-interest loans that can help investors purchase and renovate properties. In the state of Florida, the median sales price of a home is currently $375,000, up 23% from the previous year.

Florida's real estate market is attractive to investors due to its strong demand for rental properties and relatively affordable prices. According to the U.S. Census Bureau, about 67.9% of people own their homes, while 32.1% rent, and only 8% of rentals are vacant.

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Some hard money lenders, like RCN Capital, offer a tiered system with progressively lower interest rates for experienced investors. This approach can help investors save money on interest payments and increase their returns on investment.

Here are some key features of hard money loans:

RCN Capital is a top choice for first-time investors in real estate. They offer a unique tiered system that rewards experience with progressively lower interest rates.

This approach is perfect for investors who are just starting out and want to learn the ropes. RCN Capital's commitment to tailoring loan options to an investor's journey sets it apart from other lenders.

One of the key benefits of RCN Capital is their flexibility. They offer a range of loan options that can be tailored to an investor's specific needs.

Here are some key benefits of RCN Capital:

By choosing RCN Capital, investors can start with competitive terms and potentially access even more favorable rates as they gain expertise in the industry.

Investing in real estate can be a lucrative venture, but it requires access to the right financing options. Small business loans, hard money lenders, and DSCR loans are all viable options for investors.

Hard money loans, in particular, are popular among property flippers. These loans can be used to fund potential projects, and they often have faster closing times than traditional loans. For example, Ridge Street Capital offers 12-month fix and flip loans with quick online approvals and a 5-day closing time.

Ridge Street Capital's hard money loans can cover up to 90% of purchase and rehab costs, making them an attractive option for investors. Their DSCR loans, on the other hand, have low rates and are perfect for the BRRRR investment strategy.

If you're looking for a hard money loan, it's essential to understand the terms and conditions. Some lenders, like Ridge Street Capital, offer no inspection rehab draws and receive draws in as little as 24 hours. They also have a soft credit check and no pre-payment penalty.

Here are some key benefits of hard money loans: