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All California Lending can help with commercial loan requests of all types...
Hard Money Lending
We specialize in facilitating hard money loans in California. We can...
Are you searching for a hard money rehab loan for a fix and flip project?...
Hard Money FAQ
Where does the money come from for your loans?
The money to fund the loans we procure comes from a number of sources. It comes from individuals, groups of individuals, privately managed funds and other non-institutional sources.
Why is hard money more expensive than the banks?
With hard money, the investors funding your loan are doing so to make a return on their investment. The return they make needs to be better than what they are able to make in a more secure investment, such as savings accounts or bonds. In addition, the return they make needs to be based on the risk of the investment, which is why a very low loan to value deal could be funded at a much lower rate than a high loan to value deal.
What are the advantages of using hard money?
The typical advantages of using hard money include speed, flexible documentation requirements, flexible loan structures and loans that will fund transactions that other sources of funding can't.
Do you have any upfront fees?
Not typically. On most transactions the only fees you pay upfront would be the cost of an appraisal and/or the cost of a site visit. We have no application fees for our loans.
What documents are required?
It depends on the transaction. We will always need a basic 1003 loan application, credit report, clean title report, insurance information and property information. Some loan programs, such as rehab or construction loans, we will need a budget or breakdown for the work to be done, resume and license of the contractor you will be using and other items. Other transactions we may request income or asset documentation such as bank statements. Typically we can tell you upfront what will be needed for your transaction, so give us a call and we will be happy to discuss the documents we would require for your hard money loan transaction.
Do you require an appraisal?
Not always. Most of the time we do require an appraisal, but on loans such as our rehab loans we will internally value the property and send the investor out to do a site visit and drive comps to verify. For low loan to value transactions we can sometimes work with a desk appraisal or BPO, and in some instances we can work with no formal valuation at all.
What property types can we get a hard money loan on?
We will lend on most property types.
What is your minimum and maximum loan amount?
The minimum loan amount we will work with is $30,000. We do not have a maximum loan amount - if the transaction is right we can likely help.
What is your maximum loan to value?
Our maximum loan to value is typically 65%, although in some instances we can go as high as 75%.
Are your loans interest only or fully amortized?
Most of our loans are interest only, but we do also offer amortized options. We can offer interest only with a balloon payment due at the end of the term, a 30 year amortization with a balloon due after a period of time or a fully amortized loan over 3, 5 or 7 years.
What are your rates?
Our rates vary depending on the transaction. We have closed loans with rates ranging from as low as 7% to 14% or more. Most often our rates fall out somewhere between 9% and 11% on standard transactions, and 12-12.5% on rehab or construction completion transactions. Rates are typically based on the loan to value, property type and strength of the guarantor. The more conservative the deal, the better the rate will be that we can secure for you.
Do your loans have prepayment penalties?
Some do, but not all. Most of our rehab or construction loans have no prepayment penalty. Most of our loans of 24 months or less also have no prepayment penalty. On loans of 3 years, there is typically a penalty if the loan is paid off within the first six months. On loans of 5 years or more, there is typically a penalty if the loan is paid off within the first twelve months. We do have flexibility with regards to prepayment penalties, so if this is a concern for you please be sure to discuss it with us.
Can you do a second position loan?
Do you lend to corporations, LLC's or trusts?
Yes, we can help provide financing for all legal entities who are able to encumber property and borrow against it.
Do you lend to foreign nationals?
Underwriting, Approval and Closing Process
What is your minimum credit score requirement?
We have no minimum credit score requirement. Although we do require a credit report in every file, our loans are asset based.
How do you determine value?
It depends on the deal. Often times it is determined through an appraisal or price opinion, although we can also determine value through a site visit or other means.
Can you use an appraisal I have?
Possibly. Give us a call or email the appraisal you have for us to review and we will let you know.
How long does approval take?
Typically we can have an upfront approval in 24-48 business hours from the time we have all required paperwork from you. Of course your final approval is the funding of the loan!
Are tax returns required?
How quickly can you close?
We have closed transactions in as little as three business days, although that is the exception rather than the rule. Most transactions close in about 2-4 weeks. If you have a pressing need to close quickly, however, let us know and we will do our best to accommodate your needs.