Real estate investors who need quick funding for their next flip or rehab may benefit from using an asset-based loan (hard money loan). These loans feature a more expeditious application and approval process than traditional lending programs that often require applicants to provide more detailed information; they also feature higher interest rates and fees, making them suitable for Florida’s challenging market conditions.
Hard money lenders have their own set of requirements, but most will consider the current market value and loan-to-value (LTV) ratio when lending to a borrower, their credit score, experience in the field and any costs they bring to the deal as key components in their evaluation. Although their requirements can sometimes be stricter than banks’ requirements for lending money to real estate deals, hard money loans still tend to offer more flexible loan solutions compared to many traditional lending sources.
Hard money lenders require projects to have an established plan for how they will be resold, and may conduct pre-rehab appraisals to understand costs of repairs and overall marketability of properties they fund. By doing this, hard money lenders can ensure their borrowers have a realistic plan to recoup funds in an expedient fashion and offer safe and secure financing solutions to flippers who require fast financing solutions.
Hard money lenders in Florida operate under the watchful gaze of Florida’s Office of Financial Regulation, so their business models must pass muster with this body before operating legally and ethically. Furthermore, hard money lenders in Florida must abide by stringent lending laws while keeping comprehensive records and reports as part of regulatory compliance compliance requirements.
Due to these stringent requirements, hard money lending may not be for everyone; however, experienced house-flippers with proven results can greatly benefit from it. They know the risks involved and how best to mitigate them; in addition, they can demonstrate to lenders that they have regular income sources that allow them to repay loans on schedule.
Gelt Capital Group (Gelt), one of the oldest hard money lenders in Florida and widely recognized for their creative deals, specializes in hard money loans florida real estate. Gelt is known for being flexible with underwriting; accepting purchase, refinancing and rehab & rent projects as long as the LTV falls below 65%; their underwriting process also accommodates applicants with poor credit histories.
West Forest Capital is another Florida private hard money lender with an excellent track record in funding both residential and commercial properties in Florida. Their team of knowledgeable specialists understand the unique challenges presented by their state’s property market, providing creative solutions to challenging transactions while expediting loan processes – working closely with title companies to avoid delays while offering flexible terms – including first lien loans!