Thinking about financing your next real estate project in sunny California? Whether you’re planning to flip a bungalow in San Diego or invest in a rental property in Sacramento, hard money lenders in California can offer the flexibility and speed you need. Hard money loans serve as an alternative to traditional financing, making them a great option for those with tight project timelines or less-than-perfect credit. This article will walk you through the basics of hard money lending in California. We’ll explain what these loans are, how they work, what they cost, and when they might be the best choice for you. Additionally, we’ll introduce top lenders in the state and explore alternative financing options to help you find the best fit for your real estate goals. A hard money lender is a private individual or company that provides short-term loans secured by real estate. Unlike traditional lenders, who are primarily concerned with the borrower’s credit and income, hard money lenders in California focus on the property’s value. These lenders are popular among real estate investors, including those flipping houses and purchasing rental properties, who need quick funding and flexible terms. Hard money lenders use the after-repair value (ARV) — the projected value of a property after renovations — to determine the loan amount. They typically lend a percentage of the ARV to make sure the investment is profitable and secure. Interest rates on hard money loans are higher, often between 8% and 15%, with shorter repayment terms ranging from 6 to 24 months. Additional costs can include origination fees, closing costs, and points. If a borrower defaults, the lender can seize the property to recoup their investment. If you’re exploring financing options for your next real estate venture in the Golden State, hard money lenders may offer the speed and flexibility you need. Here’s a brief overview of how hard money loans work:What is a hard money lender?
How does a hard money loan work?
