Northern New Jersey Hard Money Lenders
Rates Starting at 8%
West Forest Capital is a Northern New Jersey hard money lender, financing real estate investments up to $3 million. We have gained a reputation as the fastest hard money lender among the hard money lenders in Northern New Jersey because we know how critical each day is in Northern New Jersey’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 $3 million
|Loan Size||$100,000 to $3,000,000|
|LTC||Up to 85% of purchase price|
|LTV||Up to 75% of the ARV|
|Term||Standard is 12 months. 24-36 months is available|
|Lien||First lien; second lien as additional collateral only|
|Points||1.5–2% of the loan amount|
West Forest Capital lends in the following counties in Northern New Jersey:
- Hudson County
- Bergen County
- Passaic County
- Essex County
- Morris County
- Sussex County
- Warren County
- Union County
- Somerset County
- Middlesex County
- Hunterdon County
Recently Funded Hard Money Loans
Jersey City, NJ
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 Northern New Jersey Hard Money Lender
Northern New Jersey, with its close proximity to New York City has been a favorite area for real estate investors for a long time, and recent events have made it even more attractive. One of the benefits is that the area is very economically vibrant, and opportunities can be found for real estate investors operating on any budget. Fix and flip investments have been very profitable in Union and Somerset counties. In cities like Linden, Hillside, Roselle Park, and Clifton end buyers are looking for turnkey properties and are willing to pay extra rather than renovate the property themselves — this is good news for real estate investors. The same is true going further west, notably Randolph and Mount Olive, and even in Western New Jersey such as Vernon, Sparta, and Jefferson.
In Bergen County, the demand for single family houses has also been very strong. Renovated homes in Paramus, Ridgewood, and Midland Park are closing very fast allowing investors to lock in profits in record time. We’ve also seen increased demand for commercial properties such as new “re-imagined” retail spaces, restaurants, and industrial facilities.
Financing your Northern New Jersey Investment Property
Northern New Jersey is one of the most competitive real estate markets in the United States. Working with a trusted hard money lender is imperative to getting the success you want. Using a lending partner to finance your real estate investment will greatly increase your return and give you the peace of mind of not tying up your own money.
Your hard money lender should be extremely familiar with all areas of Northern New Jersey which will make the lending process so much easier for you (We are quite easy to work with. Just read our Google reviews!). We are here to help and answer any questions at any time.
If you’d like to discuss a possible real estate investment directly with a loan decision maker, please call us at 212-537-5833.
Asset-backed Lender Focused on Customized Solutions
With our knowledge of the Northern New Jersey fix and flip market, West Forest Capital is able to structure creative transactions that fit your hard money financing needs. We fund loans based on the value of the asset so in some cases we were even able to finance more than 100% of the purchase price and rehab amount.
West Forest Capital also offers the longest hard money loan available on the market (3 years), ideal for buy and hold investors.
Give us a call or apply for a loan today!
What are hard money lenders?
Hard money lenders are non-bank, asset-based lenders. Although both banks and hard money lenders make mortgage loans, hard money lender requirements and lending criteria often varies significantly from a traditional bank. Hard money lenders put much more emphasis on the underlying property, and less emphasis on the borrower. The underwriting process is significantly shorter with a hard money lender, and a loan can often be funded within a week (as opposed to 2-3 months or longer with a traditional bank). As such, real estate investors that buy foreclosures at auctions will often use a hard money lender to fund the purchase because the terms of the auction require an expedited closing process. Also, hard money lenders fund loans on properties that a traditional bank won’t fund — an example is a property that doesn’t have a Certificate of Occupancy (CO). A hard money lender is also a great choice for somebody who has poor credit or is rebuilding their credit; a low FICO score will not prevent you from getting a hard money loan. Finally, hard money lenders can also provide loans to refinance existing lenders or as way to cash out on a property.
It’s important to note that hard money lenders only lend on investment real estate, and do not make mortgages for residential purposes. You cannot live in a property that has a mortgage from a hard money lender.
How do hard money loans work?
Because it’s significantly easier and faster to obtain a hard money loan, the interest rate will be higher than a traditional mortgage from a bank. Interest rates will vary between 9 and 12%, and there will also be between 1 and 3 points charged at closing. The term of the loan will typically be 1 or 2 years. The loan will usually come in two parts: (part 1) to fund the purchase, an amount that will often be between 70-85% of the purchase price and (part 2) funding for any rehab that needs to be done on the property to bring the property to an updated condition; hard money lenders often fund up to 100% of the rehab amount. If no rehab is required, it will not be included in the loan. If rehab is required, it will be distributed in arrears, after a portion of the work is completed. For example, assuming that $50,000 of total rehab is needed, the borrower may complete the first $15,000 of the work and ask to be funded $15,000 by the lender. They will then complete the next $15,000 of work and be funded $15,000 again. And so on. Hard money loans are usually structured so that the total loan amount (funds lent on the purchase plus funds lent for the rehab) does not exceed 65% of the property after-repair-value, known as “ARV.”
What do hard money lenders look for?
Because a hard money loan is considered a commercial loan, a hard money lender will not lend to individuals, and will only lend to LLCs. But don’t worry if you don’t have an LLC, they are very easy to create and can have only one member (you).
Hard money lenders analyze both the purchase price as well as ARV to make sure they can get paid back on loans they make. A property that is bought below or at market is an important aspect in obtaining a loan. If borrower is also taking out a loan for rehab purposes, a hard money lender will want to make sure that the repairs are being done according the repair schedule and on time. A clean title is also essential when obtaining a hard money loan. Any judgements or liens on the property or LLC that is taking out the loan (remember, the loan must be made to an LLC), will have to be cleared prior to the loan being disbursed.
It’s important to a hard money lender that their borrower is entering into an investment or transaction that will be profitable for the borrower. In other words, the hard money lender wants you to make money on your real estate investment, so that they can get paid back on their loan. The lender will ensure that there is enough “spread” in the deal, which means that the ARV will cover the purchase price, rehab costs, interest on the loan, closing costs, and any other associated fees with sufficient room left over to make the investment profitable for their client.
What is hard money used for?
- To purchase and repair a property 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.
- To buy a property in the name of an LLC. A traditional bank often will not fund LLCs, so if a borrower would like to own a property that’s not in their personal name, a hard money loan is an option.