Residential Hard Money Loans

One of the more common types of asset-based funding that private companies and private investors obtain for purchasing residential investment properties (rental or lease properties) are residential hard money loans.  The funding is available provided these properties have an established cash flow and lease/rent income potential.  As one of the premier hard money loan brokers in the country, Biz4loans can help you leverage residential investment properties at extremely agreeable terms.

We can also help you locate rehabilitation loans or financing that is obtained for the purpose of covering any building expenses or costs related to fixing up dilapidated properties.  If you are looking to acquire this type of real estate, Biz4loans can help you leverage your existing funds for these types of investments.  We understand how conventional loans can be difficult to locate at times and that investors do not have the time to wait for those loans.  If you cannot qualify for a more traditional type of loan, we can help you obtain a rehabilitation loan for properties that qualify based on current distressed conditions.

Residential Properties that Qualify for Hard Money Loans

One of the most common questions that potential borrowers ask us about residential hard money loans is “what types of properties qualify for this type of loan?” In most cases, these properties are:

  • 1 to 4 unit non-owner occupied properties (as the borrower/owner, you must prove that the property will not be your primary or secondary residence)
  • Distressed properties – flood damage repairs must be completed within 75 days
  • Multi-family housing units
  • Multi-use properties (part commercial, part residential)
  • Rehab properties – rehabilitation of the property must be completed within 75 days

The property serves as the collateral on residential hard money loans.  Since these are equity-based loans, cross collateral may be required.  If you are not familiar with cross collateralization, it refers to a situation where the collateral from one loan serves as the collateral that secures another loan.  Additionally, 1st position liens apply but in some cases, 2nd position liens will suffice.

 Residential Property Hard Money Loan Terms

Item Remarks
Appraisal required
Credit Score 580+
Interest rate 8.99% to 12.99%
Loan amount $25,000 to $550,000
Loan-to-Value ratio 65% to 75%
Points 4 to 6 Points
Pre-payment penalty 6 Months
Terms 1 to 2 years

 

Benefits of Residential Hard Money Loans

Private companies and investors oftentimes turn to procuring bridge loans or residential hard money loans due to the lack of availability of the more traditional conventional loans.  Therefore, one of the benefits with this type of loan is their availability.  Another key benefit is that you can use the proceeds of these loans to rehabilitate and renovate the property.  When the property is in less-than-attractive condition, residential hard money loans are a viable option for funding.

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