Frequently Asked Questions
What property types can be financed?
Lenders commonly finance single-family homes, 1 to 4 unit properties, condos, multifamily buildings, mixed-use and commercial properties, and some land. Many will also look at rehabs and ADU projects, depending on the plan and the budget.
What's the difference between hard money and a conventional high balance loan?
A high balance loan is a bank-style mortgage, with its own conforming or jumbo limits that change over time and by county, so check the current figure for Orange County. Hard money is a short-term, asset-based loan for investors and is a different product.
How much of the purchase price will a lender cover?
Typical ranges run up to about 65 to 80 percent of the property's value, and many rehab programs go up to roughly 75 percent of after-repair value. Each lender sets its own limits, and you'll usually need cash for the rest plus closing costs.
What are the exit strategies?
Most borrowers sell the property, refinance into a longer-term loan such as a DSCR or bank loan, or pay off the note with proceeds from another deal. You should have your primary exit and a backup in mind before you take the loan.
What happens if my flip runs long?
Many lenders offer extensions, usually for a fee, and some charge a higher rate after the original term. Ask about extension terms up front, since permit delays and contractor schedules are the most common reasons a flip runs over.
How do rehab draws work?
On many rehab loans the lender holds back repair funds and releases them in stages after work is completed and inspected. Plan your contractor payments around that schedule, because you may need some cash to start.
What documents should I have ready?
Typically a purchase contract, a scope of work and budget, proof of funds for the down payment, an ID, entity documents if you buy through an LLC, and a record of your past projects. Having these ready is the quickest way to speed things up.
Who's the best hard money lender?
The best one is the lender that fits your deal. Look at how consistently they close on time, how clearly they explain points and fees, how they handle draws and extensions, and whether they're experienced with your property type. We don't recommend one name for everyone.
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