Hard Money Lender in New York

Hard money lenders are non-bank, asset-based lenders. While both banks and hard money lenders make mortgage loans, the requirements and lending criteria often vary significantly from traditional banks. Hard money lenders focus more on the underlying property rather than the borrower. The underwriting process is considerably shorter with a hard money lender, and a loan can often be funded within a week (as opposed to 2 to 3 months or longer with a traditional bank).

Real estate investors (including those buying foreclosures at auctions) often turn to a private money lender or hard money lender to fund the purchase, since auction terms usually require a fast closing. These loans are a common tool in real estate investing, particularly when properties need repairs or lack a Certificate of Occupancy. New York real estate investors, for example, regularly use hard money loans to stay competitive in a fast-moving market.

At West Forest Capital, we fund properties that traditional banks won’t touch and can work with borrowers who have poor credit or are rebuilding it. A low FICO score will not stop you from securing financing. We also provide loans for refinancing or cash-out purposes, helping real estate investors stay flexible and move quickly.

Because it’s significantly easier and faster to obtain a hard money loan, such as a New York hard money loan, the interest rates are higher than a traditional bank mortgage. Interest rates typically range from 10 to 12%, with an additional 2 points charged at closing. The loan term is usually 1 or 2 years and can come in two parts:

1. Funds for the purchase, typically cover 70 to 85% of the purchase price.
2. Funds for rehab, if necessary, which may cover up to 100% of the renovation costs.

If rehab is required, the funds are distributed in arrears, after portions of the work are completed. For example, if $50,000 is allocated for rehab, the borrower might complete $15,000 worth of work before requesting $15,000 in funding from the lender, continuing this process until the rehab is completed.

Hard money loans are commonly used as bridge loans, flip loans, and commercial real estate loans. They are structured to ensure the total loan amount (purchase and rehab funds) doesn’t exceed 65% of the property’s after-repair-value (ARV). These loans are frequently used for investment properties, particularly in competitive markets like New York City, where quick access to funding is essential for closing real estate deals.

At West Forest Capital, we offer hard money loans as commercial loans, which means we lend to LLCs, not individuals. If you do not already have an LLC, do not worry. They are quick and easy to set up and can be formed with just one member, you.

When reviewing a deal, we look at both the purchase price and the ARV (After Repair Value) to make sure the numbers make sense. Properties purchased below or at market value typically qualify best, especially if you are also requesting funds for renovations. In those cases, we expect the rehab work to follow a clear schedule and be completed on time. A clean title is required before we can fund the loan. Any judgments or liens tied to the property or the borrowing LLC must be resolved before disbursement.

Our goal is to help you succeed. Like most hard money lenders, we want your real estate investment to be profitable. We make sure there’s enough spread in the deal to cover your purchase price, renovation costs, loan interest, closing costs, and other expenses, while still leaving room for profit. That’s how we approach every loan we underwrite.

If you’re a New York real estate investor or working on a time-sensitive project, a private money lender like West Forest Capital can help you move quickly and strategically.

A hard money loan is most often used in the following scenarios:

• To purchase and repair a property that a traditional bank will not lend on (either because of the property itself or because of the borrower’s credit), which will then be sold to a retail buyer. This is commonly called “fix and flip.”
• To purchase and repair a property that a bank will not lend on, which will then be rented out. Once rented, the property will be considered “stabilized,” and may be refinanced with a traditional bank at a lower rate.
• To fund real estate purchases that need to be done in a timeframe that a traditional bank cannot meet (for example, a foreclosure auction). While a hard money lender can often fund the purchase within a week, a bank may take 2 or 3 months or longer.
• To obtain a fast cash-out refinancing using an already-owned property as collateral.
• To quickly refinance another mortgage on the property that is coming due.
• To buy out a partner or family member. Hard Money loans are a great option to buyout a business partner and then refinance into longer term debt upon gaining full ownership of the property.