Hard Money Lenders Alpharetta

Hard money lenders operate outside of the traditional banking system and are known for offering asset-backed loans. Although both banks and hard money lenders provide mortgage options, the criteria they use differ greatly. Where banks often require extensive documentation and borrower qualification, hard money lenders are more focused on the value and potential of the property itself. This results in an expedited underwriting process, often allowing Alpharetta investors to receive funding in a matter of days—not months.

Private money loans are particularly beneficial in Alpharetta for real estate investors seeking quick closes, such as those involved in auctions or foreclosure deals. Banks typically won’t finance properties without a Certificate of Occupancy or those in need of substantial repairs, which makes hard money lending an ideal solution. Even individuals with challenged credit histories can qualify, as lending decisions hinge on property value rather than FICO scores. These lenders also offer strategic refinancing and cash-out opportunities.

For investors in Alpharetta, we’re proud to be a trusted hard money lender ready to support your next real estate transaction with speed and reliability.

Obtaining a hard money loan, such as one in Alpharetta, is notably faster and easier than the traditional mortgage process, but it comes with a higher cost in terms of interest. Typically, interest rates for these loans fall between 10 and 12%, with an additional 2 points charged at the time of closing. These loans usually come with a term of 1 or 2 years, and the funds are allocated in two primary parts:

• Funds for the purchase, typically covering 70 to 85% of the purchase price.
• Funds for rehabilitation, if necessary, which may cover up to 100% of the renovation costs.

If renovations are required, the disbursement of funds occurs in stages, after parts of the rehab work are completed. For example, if $50,000 is allocated for rehab, the borrower would finish $15,000 worth of work before requesting $15,000 in funding from the lender, repeating this process until the rehab is complete. In Alpharetta, hard money loans are widely used for bridge financing, fix-and-flip projects, and commercial real estate loans. These loans are structured to ensure the total amount (purchase and rehab) doesn’t exceed 65% of the property’s after-repair value (ARV). In competitive markets like Alpharetta, where speed is key to securing prime investment opportunities, hard money loans provide an essential funding solution.

A hard money loan is regarded as a commercial loan, meaning that hard money lenders are unable to lend to individual borrowers and instead lend exclusively to LLCs. However, if you don’t yet have an LLC, creating one is straightforward, and it can be done with just a single member (you).

In the lending process, hard money lenders focus on both the purchase price and the after-repair value (ARV) to ensure they’ll be able to recoup their investment. It’s essential that the property is purchased either below or at market value. If you’re also seeking funding for renovations, the lender will require that the repairs are completed according to the agreed schedule and within the allocated time frame. Moreover, the title of the property must be clean. Any liens or judgments on the property or the LLC applying for the loan (remember, it must be an LLC) must be cleared before the loan funds can be disbursed.

The hard money lender’s goal is to ensure that your investment project is profitable, as they depend on your success for repayment. To make sure that you have a reasonable chance of profitability, the lender will ensure there is sufficient “spread” in the deal. This means that the ARV should cover not only the purchase price and rehab costs, but also interest payments, closing fees, and any other associated costs, leaving enough room for you to make a profit on your investment.

Hard money lending is most often used by Alpharetta real estate investors in the following scenarios:

• To purchase and rehab properties (including rental homes) in neighborhoods like Downtown Alpharetta or North Point, where traditional banks might not approve loans due to property conditions or borrower credit, with plans to resell the renovated properties to retail buyers. This method is widely known as “fix and flip.”
• To acquire and improve properties that banks typically avoid, such as those in suburban areas around Windward or Avalon, which are then rented out. Once these properties are stabilized, they can be refinanced with a traditional bank at a much lower rate.
• To purchase properties in rapidly-developing parts of Alpharetta that must be secured quickly (e.g., through foreclosure auctions), where traditional banks cannot provide fast enough financing. Hard money lenders can often close deals in a week, whereas banks could take months.
• To access quick cash-out refinancing for an investment property in Alpharetta’s upscale neighborhoods, where substantial equity may already be built into the home.
• To refinance another loan on a property due to come due in Alpharetta’s northern suburbs, especially for larger properties with potential for value appreciation.