When it comes to securing quick financing for real estate projects in South Florida, traditional loans might not always be the best fit. Enter hard money lenders, a popular choice among local investors and developers in cities like Miami and Fort Lauderdale. These lenders offer flexible terms and faster funding options, making them a viable solution when you need immediate funding under a tight deadline. Whether you’re flipping a property in Coral Gables or purchasing a rental unit in Boca Raton, understanding how a hard money loan works is essential. This guide will help you manage the ins and outs of hard money loans in South Florida, covering everything from the basic concepts to the top lenders in the area. A hard money lender provides short-term loans primarily for real estate investments. These lenders typically work with house flippers, developers, and buyers of rental properties. Instead of relying heavily on a borrower’s credit score, hard money lenders base the loan amount on the property’s after-repair value (ARV). ARV is the estimated value of the property after renovations are complete. Interest rates for hard money loans are generally higher than traditional loans, reflecting the increased risk. Borrowers also pay additional fees, such as origination fees and points. If a borrower fails to repay the loan, the lender can foreclose on the property, as the loan is secured by the real estate itself. Here are some quick bullet points on how hard money loans work. Due to a higher risk, these loans are typically offered on a short-term basis, with higher funding and higher interest rates.What is a hard money lender?
How does a hard money loan work?
