Real estate investors who can’t get approved for a loan through traditional financing avenues such as banks and credit unions will often turn to private money lenders instead. This is because private money loans (also known as hard money loans) have more flexible loan requirements compared to traditional bank loans.
How are Private Money Loans Different From Traditional Bank Loans?
Lend on the Asset
Flexible Credit Requirements
Ideal for Fix-and-Flip Properties Renovations
Suitable for LLCs
Easier Application Process
Lastly, hard money loans typically involve less paperwork and fewer procedural hurdles compared to traditional loans. This streamlined process allows for quicker access to funds, which is important in real estate markets where opportunities can come and go rapidly.
You might need private loans from a hard money lender rather than loans from a credit union or traditional bank if you:
- Need financing quickly
- Your credit score is less-than-perfect
- Have renovation projects
- Have short-term investments in the real estate market
- Want minimal documentation during the application process
- Prefer asset-focused lending
- Purchasing on behalf of an LLC
You’re usually required to make a down payment, typically 20% to 35% of the property’s value. The exact percentage depends on the loan-to-value (LTV) ratio. This large down payment highlights the nature of hard money loans as short-term financing solutions designed for quick turnaround projects.
While a credit score of 600 or higher is often preferred, funding can still be available for those with lower scores, assuming other aspects of the loan application meet the lender’s requirements. This flexibility makes hard money loans an attractive option for a variety of real estate investment projects.
Private money loans offer the flexibility to finance a wide range of properties for renovation and repair. Whether you’re looking to invest in residential or commercial spaces, here are the types of properties you can renovate with a private money loan:
- Apartments
- Single-family homes
- Multi-family units
- Commercial buildings
- Retail spaces
- Industrial properties
- Fixer-uppers
- Foreclosed properties
West Forest Capital provides funds to real estate investors and others looking to finance non-owner-occupied real estate. We fund property types that include apartments, single-family, multi-family, commercial, industrial, and mixed-use buildings.
We provide rehab funds, or full construction costs, as needed. We also provide fast closings, almost always less than 12 days, and often as quick as 3 to 5 days. We’ve even previously closed a brand new loan in one day.
We lend in New Jersey, New York, Connecticut, Rhode Island, New Hampshire, Massachusetts, Pennsylvania, Georgia, and Florida
To get started or for hard money loan pre-approval, please call us at 212-537-5833 or text us at 917-267-9523.
