Hard Money Lenders Tampa, FL

Hard money lenders are non-bank lenders that base their decisions primarily on the value of the asset rather than on the borrower’s complete financial profile. Although both banks and hard money lenders issue mortgage loans, the evaluation criteria and approval timelines vary greatly. Hard money lenders concentrate on the condition and value of the property, which makes the underwriting process much quicker and often allows funding within a single week, compared to the months typically required by traditional banks.

These private loans are frequently used by investors who purchase foreclosure properties at auctions, where immediate closings are required. Hard money lenders will also finance properties that banks consider too risky, including those lacking a Certificate of Occupancy or needing extensive repair work. They are also a strong option for borrowers with low credit scores because the approval process does not depend heavily on credit history, and they can be used for refinancing or extracting equity from existing properties.

As a premier hard money lender serving Tampa, FL, we are committed to providing the funding investors need for a variety of real estate opportunities.

Hard money loans, like  Tampa, FL hard money loans, offer quick funding but come with higher interest rates, typically 10% to 12%, and an additional 2 points at closing. They are typically short-term, lasting 1 to 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.

When rehab is needed, hard money loans are typically distributed in arrears, meaning the borrower is provided funds after completing portions of the work. For example, if $50,000 is allocated for rehab, the borrower might complete $15,000 worth of work before requesting $15,000 from the lender, continuing this process incrementally until the rehab is finished. These loans are typically used for bridge loans, fix-and-flip projects, and commercial real estate investments, and are structured to ensure that the total loan amount, including both the purchase price and rehab expenses, doesn’t exceed 65% of the property’s after-repair value (ARV). In competitive markets like  Tampa, FL, where speed is crucial, hard money loans are essential for investors who need fast access to funding to secure deals quickly.

Since a hard money loan is classified as a commercial loan, it can only be issued to an LLC and not to an individual. If you don’t yet have an LLC, setting one up is simple and can be done with just one member, which could be you. This structure makes it easier for real estate investors to qualify for hard money loans and proceed with their projects without unnecessary delays.

Hard money lenders look closely at both the purchase price and the after-repair value (ARV) to ensure they can recoup their funds. Buying the property below or at market value is an important part of the loan process, as it minimizes the lender’s risk. When rehab funds are included in the loan, the lender ensures that the repairs are progressing according to the agreed timeline. It is also crucial that the property has a clean title—any liens or judgments must be cleared before the loan can be approved.

Hard money lenders want to ensure that the borrower’s project will be profitable. They are particularly concerned with ensuring that the ARV is sufficient to cover the purchase, rehab costs, interest, and closing fees, while also leaving enough room for the borrower to make a profit. The lender’s goal is to ensure a successful investment for the borrower while securing repayment of the loan.

Hard money lending is widely used by Tampa, FL real estate investors in the following scenarios:

• To purchase and repair a property (including rental properties) 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.