Qualifications for a Hard Money Loan in Palm Beach County

Are you interested in purchasing an investment property in Palm Beach County? If so, hard money loans might be the solution you need. With a hard money loan, buyers can get access to cash to purchase their next real estate property. The quick and straightforward process of applying for a loan makes working with a hard money lender even more appealing.

Here’s what you need to qualify.

Down Payment

One of the main factors in obtaining the loan is meeting the down payment requirement. The down payment serves as collateral for your loan and can range from 10% to 40% depending on the specific type of property. These down payments are calculated based on the Loan-To-Value (LTV) ratio of the property. For example, let’s say you want to purchase a residential property for $100K. If the LTV ratio offered is 90%, then you would be responsible for the $10K down payment.

Credit History

Personal credit is not as important of a factor to qualify for a hard money loan in Palm Beach County but demonstrating a clean mortgage history will be a significant part of the underwriting criteria. Generally, FICO scores above 600 are preferred although loans can be funded to borrowers with scores below that.

Understand the Property Value

The Palm Beach County real estate market has been appreciating quickly, so understanding the value of the property (in order to ensure the investor is not overpaying) is important. Demonstrating that the purchase price is below comps in the area is an excellent way to accomplish this.

Local Familiarity

Familiarity with the area is crucial. Real estate values can vary significantly from city to city and even mile to mile within the same zip code in Palm Beach County. Real estate investors should also understand trends and requirements for construction in Palm Beach County. For example, the use of wood vs. concrete is a big topic in the area.

Permits

Real estate investors should have familiarity with the local Palm Beach County requirements for permits to complete rehab, and requirements to register rental units with the city, if applicable. There are different rules when it comes to single-family vs. multi-family vs. condos – specific knowledge of the regulations surrounding the property type is important.

Liquidity

Having enough liquidity (cash in the bank) to fund the down payment, closing costs, and starting any rehab is always critical. A cushion should also be accounted for in the event there are construction contingencies.

Property Types

Residential properties, mixed-use, commercial, or industrial properties almost always qualify for hard money loans in Palm Beach County. Unique properties might require additional due diligence, so it’s important to work with a flexible lender who can lend on a variety of properties. At West Forest Capital, we can lend on any type of property.

Structures in Place

It is easier to qualify for a hard money loan on properties where there is already a structure in place vs. ground-up construction. The less rehab that is required, the easier it is to qualify for a hard money loan in Palm Beach County.

Minimum Loan Sizes

Most hard money lenders have a minimum loan size of $100,000. This amount is for the purchase price and excludes the rehab funds amount.

Appraisal

This is ordered by West Forest Capital. The appraisal should be close to or exceed the purchase price.

Insurance Policy

West Forest Capital should be the loss payee and additional insured.

Builder’s Risk Insurance

For extensive rehab projects, a builders risk policy is required.

Lender Title Insurance

The hard money lender, in our case West Forest Capital, should be listed as the beneficiary.

Return on Investment

The investment should always provide a good return to the real estate investor. The goal is for the investor to make a profit on the deals we fund.

Work with a Reputable Title Company

The hard money lender, in our case West Forest Capital, should be listed as the beneficiary.

Lender Title Insurance

The hard money lender, in our case West Forest Capital, should be listed as the beneficiary.

Return on Investment

The investment should always provide a good return to the real estate investor. The goal is for the investor to make a profit on the deals we fund.

Work with a Reputable Title Company

When you work with a reputable title company, this will give the hard money lender additional confidence in the loan (we are happy to recommend our preferred title companies).

Work with a Reputable Contractor

Working with a good contractor that has experience with various building codes and local regulations is important if there is rehab required. A contractor that has previously worked with a Palm Beach County hard money lender is even better since they will understand the draw process.

Loan Rates and Terms with West Forest Capital

Our loan rates are as follows:

  • 9.5% – 11% interest only
  • Amortization option available
  • 1 to 2 points origination

Our loan terms are as follows:

  • First lien preferred (second can be considered)
  • 1 year term
  • 2 year term available
  • Up to 85% of purchase price
  • Up to 100% of rehab
  • Total Loan amount not to exceed 70% ARV
  • Appraisal must be ordered by West Forest Capital

Get Your Hard Money Loan in Palm Beach County with West Forest Capital

There’s never been a better time to apply for a hard money loan in Palm Beach County. West Forest Capital provides funds to real estate investors and others looking to finance non-owner-occupied real estate. We fund property types which include:

  • Apartments
  • Single-family
  • Multi-family
  • Commercial
  • Industrial
  • Land

We provide rehab funds, or full construction costs, as needed. We also provide fast closings, almost always less than 10 days, and often as quick as 3 to 5 days. We’ve even previously closed a brand new loan in one day! In addition to Florida, we lend in New Jersey, New York, Connecticut, Massachusetts, and Pennsylvania.

To get started with your hard money loan, please call us at 212-537-5833 or text us at 917-267-9523.

 

Please contact me

Please contact me

To get started with your hard money loan,
please call us at 212-537-5833 or text us at 917-267-9523.

Hard Money Loans: FAQs

Hard money loans are short-term loans that are used to acquire investment properties to rehab and then flip for resale or rent. These loans are used by real estate investors and others who are looking to finance non-owner occupied real estate.

Yes, we can often pre-approve you on the same day as when you apply. For a pre-approval letter, please call us at 212-537-5833 or text us at 917-267-9523.

Yes, we do fund rehab costs through a hard money loan. In fact, we can fund 100% of your rehab costs. To do so, you will need to complete a portion of the project. We then send an inspector to review it, and we distribute the funds for the completed work. The entire process takes 2 to 3 days.

Yes, we provide extensions up to 6 months or longer on a case-by-case basis. We understand the timeframe complexities when rehabbing or building a new project – we will work with you.