Hard Money Lender in Ithaca, NY

Hard money loans are considered easier and faster to obtain than traditional bank mortgages, but as a result they carry higher interest rates. Typically, these rates range from 10 to 12 percent, with an additional two points due at closing. The length of the loan is often one or two years, and depending on the project, the loan can be divided into two sections.

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.

In situations where rehab is required, funds are released after the work is completed, also known as disbursement in arrears. For instance, if the loan includes $50,000 for renovation, the borrower would first perform $15,000 worth of work before requesting reimbursement of that same amount from the lender. This continues step by step until the entire rehab budget has been exhausted.
These loans are commonly applied as bridge financing, fix and flip loans, or commercial property loans. They are designed in such a way that the full loan, which includes both purchase money and rehab funds, does not exceed 65 percent of the property’s projected ARV. They are especially valuable in fast-moving real estate markets where immediate access to capital is necessary for investors to secure properties.

At West Forest Capital, our hard money loans are structured as commercial loans, which means we lend exclusively to LLCs rather than directly to individuals. If you have not yet formed an LLC, there is no need for concern, as they can be established quickly and easily with just one member, which can simply be you.

When analyzing a loan proposal, our team carefully considers both the purchase price of the property and its projected ARV, or After Repair Value. We want to confirm that the transaction makes sense from an investment perspective. Properties bought at market value or, ideally, below market value tend to qualify under the best terms, particularly when additional funding for renovations is included in the request. In those cases, we expect a detailed renovation timeline, with clear milestones and an assurance that the work will be completed as scheduled. Additionally, we require that the property’s title be free of complications, which means all liens or judgments associated with the property or the borrowing LLC must be cleared before funding can proceed.

Our commitment is to help our borrowers succeed in their investment ventures. Like other experienced hard money lenders, our goal is to ensure that your real estate project remains profitable. This involves making certain there is adequate margin to cover every component, including the purchase price, renovation costs, loan interest, closing costs, and any other associated expenses, while still leaving sufficient room for profit. That is how we consistently approach underwriting.

For investors working in Ithaca or taking on projects where timing is critical, West Forest Capital is positioned to provide the speed and flexibility that traditional lenders cannot offer.

A hard money loan is most often chosen for the following purposes:

• To acquire and repair a property that banks are unwilling to lend on because of either the borrower’s credit profile or the condition of the property itself. The property is then resold to a retail buyer, making this a fix and flip investment.
• To buy and improve a property that a traditional bank will not finance, with the goal of renting it out. Once it is stabilized with tenants, the property can then be refinanced at a lower rate through a conventional lender.
• To fund real estate purchases requiring very fast closings that banks cannot accommodate, including situations such as foreclosure auctions. Hard money lenders often provide financing within a week, while banks may take months.