Hard Money Investment Loans

Hard Money Loans
for San Francisco, San Mateo, Sacramento, Los Angeles, and All of Orange County, CA

Hard money is similar to traditional hard money but may sometimes be more expensive as the risk is higher on investment property or non-owner-occupied properties. Hard money loans may not be subject to the same consumer loan safeguards as a residential mortgage may be in the state the mortgage is issued. Hard money loans are often short term and therefore interchangeably referred to as bridge loans or bridge financing.

What is a San Francisco hard money commercial loan?

The definition of "hard money commercial," when referred to in real estate financing, is essentially a non-bankable loan. The name hard money commercial is frequently interchanged with "no-doc" or private loans. For a hard money commercial loan, the underwriting decisions are based on the borrower's hard assets (real estate). Hard money commercial loans typically close relatively quickly. Saxe Mortgage is the leader in San Francisco, CA hard money commercial lending (NO-DOC / Private lending).

Commercial hard money lender and bridge lender programs are similar to traditional hard money in terms of loan-to-value requirements and interest rates. A commercial hard money or bridge lender will usually be a strong financial institution that has large deposit reserves and the ability to make a discretionary decision on a non-conforming loan. These borrowers are usually not conforming to the standard Fannie Mae, Freddie Mac or other residential conforming credit guidelines. Since it is a commercial property, they usually do not conform to a standard commercial loan guideline either. The property and or borrowers may be in financial distress, or a commercial property may simply not be complete during construction, have its building permits in place, or simply be in good or marketable conditions for any number of reasons.

Some private investment groups or bridge capital groups will require joint venture or sale-lease back requirements to the riskiest transactions that have a high likelihood of default. Private investment groups may temporarily offer bridge or hard money, allowing the property owner to buy back the property within only a certain time period. If the property is not bought back by purchase or sold within the time period, the hard money lender may keep the property at the agreed to price. For more information about our non-owner-occupied mortgage and how we can help with commercial lending, please feel free to reach out to our hard money lenders. The Saxe Mortgage Company is proud to serve clients throughout San Francisco, San Mateo, Sacramento, Los Angeles, the communities surrounding Orange County, CA and the San Francisco Bay area.

Hard Money Commercial Lending Verses Traditional Lending

Traditional loans from banking institutions rely heavily on the borrower’s income, credit, tax returns, etc., as opposed to a hard money commercial loan's primary reliance on the hard real estate asset. Along with requiring substantially more documentation, conventional lenders have minimum credit scores (typically low 700 Fico and above) as opposed to hard money commercial loans that are underwriting on the collateral as opposed to the borrower’s credit. Along with different underwriting standards, loans on conventional commercial loans can take months to close; hard money commercial loans close much quicker. The final important differentiator between hard money commercial financing and conventional financing is the interest rate. Since there is more risk in a true collateral-based loan, the interest rates are higher than a conventional mortgage.

When is a hard money commercial loan appropriate?

There are numerous circumstances where a hard money commercial loan is the best option for a client.

Borrowers with impaired credit
Tax Liens/judgements/unpaid utility bills, etc.
Partner buyout
Owner occupied properties
Time constrained borrowers
Foreclosure avoidance
Foreign nationals
Complex loans with multiple pieces of collateral
Deferred maintenance

Hard Money Investor Loans

Hard money investor loans are provided by hard money lenders like Saxe Mortgage for purchase of real estate and for other such investments. Through hard money investor loans, fast access to capital is achieved for the purpose of real estate investment. In many circumstances, hard money investor loans prove to be a wise decision.

Borrowers have many questions and often doubts regarding hard money investor loans and due to these, they are not able to take any concrete decisions. The biggest reason for most of the confusion is understanding the difference between a hard money loan and the conventional mortgage loan.

Conventional mortgage loans are provided on the basis of credit rating, income, etc., while hard money investor loans are the asset-based loans. Funding is done in a quick manner in hard money investor loans and a person can expect to get funds for investing in real estate, at times in less than 72 hours.

These loans are provided for commercial projects, residential units like single family homes and other types of real estate. Due to the qualifying requirements, hard money investor loans have higher rates as compared to conventional mortgages.

These rates may vary with the market. Higher interest rates on hard money investor loans have proved as a restriction for many non-astute investors. Smarter investors understand the time value of money and are less interested in the rate. Loan-to-value on hard money loans is normally <70%.

Repayment of hard money investor loans are also short as compared to conventional mortgages. Some programs have a repayment period from 6-12 months, and others up to five years. Hard money lender's requirements include vacant dwelling insurance, flood certificate, inspection etc. Costs regarding these with conventional mortgages are the responsibility of the borrower. Hard money investor loans offered by many lenders also carry origination points. The credit check is one factor that has made hard money investor loans very popular. Although a credit check is done, it is generally not for the score but to check for liens and judgments before offering asset based loans. These types of loans have attracted people with bad credit in huge numbers in making investments.

Minimum and maximum loan amount differs from one source to another. These may be $25,000 and $1,000,000. Appraisals are often required by the hard money lenders for offering loans but can sometimes be waived if the loan is close to where the lender is.

Easy availability, and asset based lending are the key features of hard money investor loans. Call a Saxe Mortgage representative today to learn about these loans.