Directory of Private Money Lenders
The Norris Group
The Norris Group is a longtime leader in offering California Hard Money Loans. They claim to provide millions of dollars a month to clients all throughout the State of California. Their loan options range from tradition 1 year rehab flip loans with interest rates at around 10% to build to flip loans that come with an LTV of up to 65% of future value. The Norris Group also provides rental refinance programs that carries a term of 3 years.
Pacific Private Money
Equinox Home Financing
Equinox offers same day approvals on hard money loans in California. They claim a 3 business day funding window once the file is complete with interest rates that start at around 8%. Equinox has no limits when it comes to the number of properties you own and past bankruptcies or foreclosures shouldn’t be an issue. They fund 1st and 2nd trust deed private money loans in California of up to $5 million.
Capital Funding Financial
Equity Wave Lending
Equity Wave has been in business since the early 90’s, and they claim to have lent out well over 3 billion dollars. They’re primary focus is in California where they offer private real estate loans on any type of property from $100k to over $2,000,000. Per their website, Equity has one of the fastest processing times in the State, with money available in 1-2 weeks for approved loans. They also have an interesting finance program that’s geared towards foreign nationals who may not have an established FICO or Social Security information.
Texas Hard Money Pros
As you can probably tell by the name, this online lender focuses exclusively on Texas residents interested in private money financing. They feature a variety of programs such as Fix and Flip, 2nd Trust Deeds and Commercial Refinance Loans to name a few. As the focus is on only one state, they’re able to work through many financing scenarios and promise 24 hour docs with same day underwriting in most cases.
Level 4 Funding
Level 4 is a direct hard money lender that seems to focus on consumers in Arizona and Texas. Per their site, you can get a written approval in 24-48 hours with funding in a matter of days. Interest rates will start in the high 7’s and you can expect a payoff term of 2 months to 4 years. They specialize in trust deed investing and commercial finance loans. Level 4 Funding claims to have provided over 30 million to applicants over the past few years.
North Coast Financial
North Coast has been operating in California since the early 80’s. This company is based in San Diego, but they work with borrowers all throughout the state. Per their website they focus on fix and flip, investment property, and bridge loans. Besides residential funding they can also handle commercial deals. North Coast will also consider funding owner occupied private money loans in the right situation.
Civic is a direct hard money lender in Southern California. They primarily offer fix and flip and buy & hold loans. They claim to have fast processing times as they do all underwriting in house and handle all appraisals. Applicants will need to show at least 5 months of interest payment reserves and a sufficient down payment. Civic has no FICO or credit requirements for hard money loans. They also lend to LLC’s and provide financing for many real estate deals upon request.
This online lender is different from all the private money lending companies listed here. Instead of taking out a hard money loan you have the option of using a car title as collateral for a loan. With a secured loan you can get approved quickly and having a poor credit score isn’t really a concern. A secured lender is able to approve you in one business day and you can often cash out up to 65% of the vehicle’s value. Because of their fast processing and limited credit requirements, these types of loans can be a viable option for someone who’s also considering a hard money loan.
Arixa Capital is a California private money lender that claims to have over 350 investors that will provide funds for your lending needs. They’ve been in business since 2006 and feature a variety of real estate financing options. Besides their California hard money loans, they also provide commercial financing and non owner occupied funding for a rehab loan. Arc specializes in funding for California residents, but they also provide services in many western states.
HLM is a direct private money lender in business for over 15 years that specializes in hard money loans and trust deed investments. They currently serve the states of Nevada and California and handle direct loans that range from about 100k to well over 5 million. Interest rates start at 6.5% and they claim that foreclosures and bankruptcies won’t be an issue. Their primary focus is on non owner occupied properties and ground up construction.
PB Financial Group
PB Financial has provided direct funding in California for over a decade with well over 2,300 loans funded. They claim to look past an applicant’s past credit issues and instead focus on the property’s equity and repayment qualifications. Their hard money loans range from $30,000 to $3 million or higher, with rates that start at about 8%. They may be able to finance your project even if there’s an active foreclosure or bankruptcy.
Evoque specializes in all types of residential and commercial lending with a focus on California private money lending. They’ve been in business for over 14 years and specialize in the Southern California market. Poor credit is not an issue with their hard money program and you can expect a window of 8-12 days to close a loan. Rates will vary with each independent lending circumstance and you can borrow up to 70% of current equity.
What Is A Hard Money Loan, And Why Would I Need One?
Hard money loans can go by a few different names. They are referred to as private money loans and bridge loans. All these different names refer to the same specific type of loan that is secured by real property. Most companies require borrowers to present an income-generating property. Companies and unaffiliated investors often issue these loans. As you can expect, the rates are higher with this type of financing compared to traditional mortgages and real estate loans. Most lenders listed here claim to provide interest rates that average anywhere between 7 and 12%. These finance rates depend on a variety of factors that, include the amount of collateral and the ability to pay back the loan. While these rates are high, they represent the risk taken on by private investors willing to lend their funds. Private money loans will typically mature in a much shorter period as well. The best hard money lenders will have rates that fall within certain limits. Most online loan programs are consistent as well.
In an ideal situation, you won't need to seek private lender funding for your real estate deals. Most real estate borrowers will go with a traditional lender that affords them low rates and more favorable payment terms. This type of financing is for consumers that need cash quickly. Perhaps they don't want to deal with the traditional application loan process. Or some issues prevent them from getting a conventional loan. These issues could include a lack of income or poor credit. With a hard money loan for your real estate investment, the emphasis is on the overall collateral. Most direct lenders focus on the total residential property value and down payment. Everything else, like closing costs and repayment schedules, is secondary. Another benefit of private cash loans is that they can bridge the gap between traditional financing. That's why you hear the term online bridge loans. Sometimes a conventional source of funding is not enough to secure the amount of financing you need. A bridge loan or private cash financing can get you over the top.
There are hundreds of companies all throughout the country that provide funding. To save time and speed up the process it's important to understand a few things. You need to search our list of hard money lenders and find a service that provides direct loans in your state. The last thing you want to do is find a company that fits your needs. Only to send in your information and find out they don't offer funding in your state. With our list of private money lenders, we break down which states each lender provides financing in. Another thing to consider is what the specific loan amounts are that each company offers. How much funding are you looking for and what are your preferred terms? Be sure your needs line up with what your specific lender can provide. Also, be sure your collateral is enough to secure private money financing. Remember this is private money not backed by a bank or traditional mortgage company. This type of financing is unique and often backed by real estate investors, not big banks. With an asset-based loan, you will see a much quicker underwriting process as you're bringing collateral to the table in case of default. Each company has quirky rules that may disqualify a real estate investor from being approved. We do our best to point out specific issues or restrictions for each hard money lender in our list.
Answers From Our Hard Money Lending Experts
Most of these loans are issued by private investors. They can be a group of people pooling money together looking for a nice return on investment or a company that simply specializes in private money lending. One thing to remember with this type of funding is that private money lenders aren't backed by a bank or mortgage company. They're putting up large sums of cash and each firm has their own restrictions and rules when it comes to the qualification process. Some private lenders can get you approved within one business day, the downside is always the fact that you will pay more in finance charges.
When looking for an online lender that suites your needs make sure they are licensed and regulated to provide private funding in your state. Most private loans aren't provided by mortgage companies and big banks, but the companies still need to be licensed. Working with a licensed provider of online bridge loans will ensure you're protected by regulations and rules of your state. Be sure to look for the individual lender's licensing information If you're submitting your application online.
People use hard money loans because they need funding quickly. The lending environment in California is very crowded and companies will fight for your business to close a loan quickly. Unlike traditional mortgage financing, there's not a traditional underwriting process that takes weeks and sometimes months. Most private money loan companies want to make sure you have adequate collateral available in case the loan defaults. There's less emphasis on your credit report and past credit issues. As long as you have adequate income coming in from your property you should be in good shape. Most applicants that find a private lender will see a closing time that stretches out over a period of days instead of weeks. Applicants turn to hard money lenders because of benefits like a quick closing time. They know the rates will be higher and terms less favorable, but sometimes this is what you need to get fast cash.
Most companies in our list of private lenders can typically process a hard money loan in days instead of weeks. But they will still need an inspection. We often see less emphasis placed on a physical inspection for real estate when talking about private investor funding. Often, inspection records and 3rd party appraisals can be enough in terms of a lengthy physical inspection. As with most types of financing, each company will have different terms and requirements to underwrite and fund direct loans. While many aspects of the funding process are done online, there are still some things required in person. Some lenders require a property inspection before all documents are submitted for processing. Check with your lender to find out if a physical property inspection is required in their lending process. Bottom line, most of the companies in our private money lender directory will need some sort of inspection.
Private money lenders in California work with a variety of properties and projects as long as they know there is a deal in place with profit to be made. Some companies focus primarily on single family residential loans only. Others are more diversified and handle large projects like commercial buildings and land projects. There are also short term loans available for fix and flip and rehab projects. It all comes down to the private lender wanting to know that money will be made on the initial financing. There are dozens of other uses for hard money loans that we won't even list here. Don't hesitate to ask if you have a project that's outside the box. Many of the best lenders are looking to lend and will work with you to finance most reasonable projects.
By this point, you should already know that rates on hard money loans for any California real estate are high. While most traditional mortgage companies charge rates of 3-4%, a private money lender will often be at 7-10%, depending on the risk involved. There are also the upfront points to consider. California companies will usually charge points 2-3 points higher than what you typically see. Even though hard money rates are usually at 7-10%, they can quickly climb into the teens for riskier deals. We've seen rates approaching 20% here in California for high risk commercial property loans. Often in situations like these, the lender and applicant understand there is a significant risk and the fees are set by the private lenders.
That's one good thing about hard money lending. Good credit is not a necessary part of what you need to qualify with most financial institutions that provide these private loans. The rates are high because these companies aren't judging your creditworthiness on past credit issues or foreclosures. Most people who apply online will have already sent off their apps to traditional mortgage lenders. These companies will often deny them for funding because of low credit scores a poor loan to value ratio or past bankruptcies or foreclosures. As mentioned above, hard money lenders want to know that there is collateral backing the loan. As long as they see money flowing in the form of rent or other payments they will be more comfortable to fund the loan. Lenders want to make sure there is enough equity and money available to offset the risk of the borrower missing payments and defaulting on the loan.
Simply put a hard money loan occurs when someone puts up money for a real estate project. These types of projects are often single family homes or large commercial properties. We often refer to hard money lenders as private money lenders as they're essentially the same thing. With this type of funding, you're not relying on a bank or commercial funder to offer funds for a project. Most of the online companies shown in our listing are smaller non bank organizations that rely on funds from private individuals. There are also companies in California that rely on funds from groups of people that pool their money together. They do this to see a higher rate of return that what would be typical with traditional investments.