Hard Money Lender Brooklyn
Interest Rates Starting at 10%
West Forest Capital is a Brooklyn, New York hard money lender, financing real estate investments up to $5 million. We have gained a reputation as the fastest hard money lender in New York because we know how critical each day is in Brooklyn’s competitive real estate market.
- We are a direct lender, not a broker
- Same day pre-approval
- Funding in 3-5 days, although 1 day is possible
- Loan amounts up to $5 million
Property Types
- Multi-family
- Single-family Investment Properties
- Condominiums
- Apartments
- Co-ops
- Retail
- Small Office Buildings
- Industrial & Warehouse
- Duplex
- Triplex
- Quadplex
- Mixed-Use
Lending Parameters
| Loan Size | $100,000 to $5,000,000 |
| LTC | Up to 80% of purchase price |
| Rehab Funding | 100% |
| LTV | Up to 70% of the ARV |
| Term | Standard is 12 months. 24-36 months is available |
| Lien | First lien; second lien as additional collateral only |
| Interest Rate | 10%–12.5% |
| Points | 1.5–2% of the loan amount |
Cities Covered
- Bedford-Stuyvesant
- Brooklyn Heights
- Bushwick
- Caroll Gardens
- Clinton Hill
- Cobble Hill
- Crown Heights
- Coney Island
- DUMBO
- Flatbush
- Park Slope
- Prospect Park
- Sheepshead Bay
- Williamsburg
- And Many More!
Recently Funded Hard Money Loans
Naples, FL
- Location: Naples, FL
- Original Purchase: $1,950,000
- Rehab Budget: Not Required
- Loan Amount: $1,400,000
- Exit Strategy: Paydown
- Investor Capital: $550,000
- Equity Created: $62,500
- Investor Return on Capital: 11,4%
We made a Florida hard money loan to a client who purchased a three-bedroom, three-bathroom condo in a sought after building in Naples, Florida. Our client’s strategy was to generate returns by using the property for seasonal and short-term Airbnb rentals, which would generate higher ROIs vs. an annual lease. We provided a hard money loan of 71.8% of the purchase price, and our client self-funded light rehab, mostly cosmetic in nature. Our client repaid our loan with a paydown generated from the sale of another property. At the time of paydown, the property experienced appreciation of nearly $63k.
New York, NY
- Location: New York, NY
- Purchase Price: $3,800,000
- Rehab Budget: $200,000
- Loan Amount: $1,100,000 at Closing + $200,000 Rehab = $1,300,000
- Exit Strategy: Sale
- Investor Capital: $3,800,000
- Equity Created: $650,000
- Investor Return on Capital: 17.1%
This New York hard money loan was made to a client who owned an existing building in Manhattan. The building consists of six full floor condominiums, and our loan was collateralized by one of the units. At the time of our loan, there was no existing debt on the building. Our loan consisted of two parts: $1.1m at closing for general renovation and upgrading of the building (including replacing the elevator) and $200k specifically used to rehab the subject property. After the extensive upgrades were completed, the unit was put on the market and sold for $4.6m, an increase of $650k from the original appraisal. Our loan was paid off with a portion of the proceeds from the sale.
Miami, FL
- Location: Miami, FL
- Purchase Price: $750,000
- Rehab Budget: $110,000
- Loan Amount: $543,750 at Closing + $110,000 Rehab = $643,750
- After Repair Value: $1,125,000
- Exit Strategy: Refinance
- Investor Capital: $206,250
- Equity Created: $265,000
- Investor Return on Capital: 128.4%
Our client utilized a hard money loan in Miami, Florida to fix and flip this property in Surfside. We funded 72.5% of the purchase price, and 100% of the $110,000 rehab budget. Our client spent approximately 5 months renovating the house, and thereafter, the property sold within a week of being on the market. The closing took place approximately a month later, and although the loan was only outstanding for 6 months, there was no prepayment penalty assessed. Our loan was paid back with a portion of the proceeds from the sale, netting our client north of $200k after accounting for all holding and closing costs.
Why Use a Hard Money Loan
- If you need funding fast. While a typical bank may take months to review your loan application, West Forest Capital offers same day hard money loan approval, and funding within 3-5 days. In an emergency situation, we can even fund in 1 day!
- If the property isn’t stabilized. Sometimes, it’s not a question of time, but it’s the actual property that a traditional bank won’t finance. Examples include a property that requires rehab, missing a Certificate of Occupancy (CO), or does not have a strong rental history. Hard money lenders such as West Forest Capital will be able to fund the property when a bank can’t.
- If you have poor credit. West Forest capital understands that events that negatively influence one’s credit score can happen from time to time. Therefore, we mostly consider the value of the property, rather than FICO score or debt-to-income ratios when considering funding a loan.
- If you don’t want to take a loan in your personal name. A traditional bank is likely to require that a property is owned directly by an individual they are making the loan to. If you would like to own the property in an LLC, or if you own too many properties for a bank to finance you personally, a hard money loan is a great option.
Why Choose a Brooklуn Hard Money Lender
Financing your Brooklуn Investment Property
The real estate market in Brooklуn has been one of the better markets in the New York area from an appreciation standpoint. Given the diversity of real estate – from smaller residential to larger commercial – a host of investors, ranging from very sophisticated institutional to smaller mom and pop types, all participate.
Our goal is to not only be the fastest Brooklyn hard money lender, but to be one that you can fully trust. We do what we say, and have zero tolerance for bait and switch. We are a direct lender, not a broker, and lend our own funds. So if you get a funding commitment from us, you know you will be funded.
Asset-backed Lender Focused on Customized Solutions
With our knowledge of the Brooklyn real estate market, we structure hard money loans that fit your financing needs. The loans are determined by the value of the asset, which means, if provided additional collateral, we can fund 100% of your purchase price.
West Forest Capital also offers the longest hard money loan available (3 years). This is an ideal solution for investors that need additional time to stabilize their real estate investment before refinancing or selling the property.
Have a loan scenario? Give us a call today!
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A New York direct lender you can rely on
FAQs
What are hard money lenders?
Hard money lenders, distinct from traditional banks, operate as non-bank, asset-based lending institutions. While both banks and hard money lenders provide mortgage loans, there are significant differences in their requirements and lending criteria. Hard money lenders prioritize the value of the underlying property over the borrower’s qualifications, resulting in a significantly shorter underwriting process. Loans from hard money lenders in Brooklyn are often funded within a week, contrasting with the lengthier timelines typical of traditional banks, which can stretch to 2-3 months or more.
Given their expedited processes, hard money lenders are preferred by real estate investors, especially those acquiring foreclosures at auctions where rapid closings are required by auction terms. Moreover, hard money lenders finance properties that traditional banks may decline, such as those lacking a Certificate of Occupancy (CO). Additionally, hard money lending in Brooklyn offers a viable solution for individuals with poor credit or those aiming to rebuild their credit, as a low FICO score does not serve as a barrier to obtaining a loan.
Furthermore, hard money lenders provide versatile lending options beyond property acquisitions. These include refinancing existing loans and accessing cash from property equity, making them a valuable resource for investors seeking to capitalize on their real estate assets.
It’s essential to understand that hard money lenders exclusively provide financing for investment real estate and do not extend mortgages for residential purposes. Properties financed by hard money lenders cannot be used as primary residences.
How do hard money loans work?
Obtaining a hard money loan is notably quicker and simpler than securing a traditional bank mortgage, but it comes with higher costs. Interest rates for hard money loans typically range from 10 to 12%, and borrowers can expect to pay between 1.5 and 3 points at closing. These loans usually have a term of 1 or 2 years.
A hard money loan is typically divided into two parts. The first part finances the property purchase, often covering 65-80% of the purchase price. The second part provides funding for any necessary property rehabilitation, with hard money lenders often financing up to 100% of the rehab costs. If no rehabilitation is needed, it will not be included in the loan.
For properties requiring rehabilitation, funds are disbursed incrementally, after completion of each portion of the work. For instance, if $50,000 is required for total rehab, the borrower may request $15,000 after completing the initial phase of work, with subsequent disbursements following a similar pattern. Hard money loans are typically structured to ensure that the total loan amount, covering both purchase and rehab funds, does not exceed 65% of the property’s after-repair-value (ARV).
What do hard money lenders in Brooklyn look for?
Hard money loans are classified as commercial loans, meaning they are tailored for LLCs rather than individuals. If you don’t currently have an LLC, there’s no need to worry. Forming one is a simple process, and it can even consist of just one member, which could be you.
Hard money lenders conduct thorough assessments of both the purchase price and the After-Repair Value (ARV) to safeguard their loan investments. Securing a property at or below market value is pivotal for loan approval. Moreover, if the borrower intends to finance rehabilitation work, the lender ensures that repairs progress according to schedule and are completed on time. A clear title is also imperative for hard money loan approval. Any outstanding judgments or liens on the property or the LLC taking out the loan (given that loans must be made to an LLC) must be resolved before loan disbursement.
Hard money lenders place great importance on the profitability of their borrowers’ investments or transactions. In essence, they strive for their borrowers to earn a profit from their real estate endeavors to facilitate loan repayment. To accomplish this, the lender verifies that there is adequate “spread” in the deal. This entails ensuring that the After-Repair Value (ARV) covers not only the purchase price and renovation expenses but also the loan interest, closing costs, and any other related fees, with sufficient margin for the investment to be profitable for their clients.
What is hard money used for?
A hard money loan in Brooklyn is most often used in the following scenarios:
- Engage in the acquisition and renovation of a property deemed unsuitable for traditional bank financing (due to either the property’s condition or the borrower’s credit profile), with the intention of selling it to a retail buyer. This strategy is commonly referred to as “fix and flip.”
- Invest in the acquisition and restoration of a property deemed ineligible for traditional bank loans, with the plan to rent it out. Upon achieving a stable rental income, the property can potentially be refinanced with a conventional bank at a reduced interest rate.
- Hard money loans are commonly utilized for real estate transactions with urgent timelines, such as foreclosure auctions, which traditional banks may struggle to meet. While hard money lenders can often provide funding within a week, banks may take 2 or 3 months or longer.
- Secure swift cash-out refinancing by utilizing an owned property as collateral.
- Expedite the refinancing process for another mortgage on a property nearing its maturity date.
- Facilitate property acquisition under the umbrella of an LLC. Traditional banks typically refrain from funding LLCs, making hard money loans an attractive alternative for individuals seeking to own properties outside their personal names.