How to Find a Hard Money Lender In Southern California

Hard money loans have become the go-to tool for real estate investors looking to quickly turn properties with improvements that make them market-ready to consumers, income property investors, and small businesses. No matter your niche, there are loan programs designed to suit, from property rehabilitation loans to fix and flip bridge loan programs. So what's the real difference? How do you pick out hard money lenders California? Is there a real difference from one to the next?

What Hard Money Lenders Have in Common

Hard money loans are by definition short-term loans secured with an asset. The providers of these loans structure them according to a niche audience's purpose, so working capital loans and flipper loans are based on the same principles, but they use very different approaches. Where a flipping loan likely uses the asset being improved and sold as the collateral, a working capital loan uses an asset you own and have equity in. Apart from that basic principle, there are a lot of differences, and the target audience a lender seeks is going to make a big difference when it comes to loan costs, assets accepted as collateral, and the terms available.

Hard Money Loans for Real Estate

If you're looking for bridge loans for real estate investment, the ability to secure the loan with the property you're purchasing is essential for your own risk management. While there are investors who choose to use established income properties as the basis for working capital loans that finance their short-term flipping activities, that technique requires a mature investment portfolio with a variety of properties that have available equity. By contrast, a hard money bridge loan only requires the property you're purchasing. It's a lot more accessible. Expect your terms to vary between 12 months and 36, with 18-24 month loans being the most common. If you're not sure how long a property will take to remarket, shoot for a longer loan term from a lender that doesn't penalize you for paying early.

Additional Purposes for Hard Money Loans

Real estate investors and small business owners alike often need access to loans to finance short-term moves other than a quick flip. In those cases, it's a good idea to seek out hard money lenders Los Angeles with purpose-built products. For example, a short-term property improvement loan secured to the property for six months can provide the financial breathing room needed to make improvements needed to qualify for the long-term financing you need for income properties you'll be managing for pass-through income. What you'll often find is that top private lending firms offer a range of hard money products for different purposes. There's a good chance the same company you use for flipping loans can also provide improvement loans and even working capital loans for your businesses outside of real estate, if you ask about them.

State-Wide Lending Options

Many investors who start in Southern California find themselves moving upstate for more opportunities as their business expands. If you see yourself investing state-wide, it's a good idea to seek out lenders who can follow you north when you're ready to expand past Los Angeles, San Diego, and the towns in between.