I love mentoring new real estate investors who are serious about turning it into a full-time career—they’re always enthusiastic and willing to learn. One topic that comes up a lot in my mentorship sessions is hard money financing. Since these loans are usually offered by private companies rather than the big banks we’re all familiar with, novice investors often don’t know which lenders to trust. The best way to find a reputable hard money lender is through recommendations from other experienced investors, like me.
The Top 6 Best Lenders for Real Estate Investors
I compiled a list of the best lenders for real estate investors based on my own experience and the experience of other veteran investors in my network. These hard money lenders all have a national or multi-state presence, as well as reasonable loan terms and trustworthy reputations.
Residential Capital Partners
Residential Capital Partners (also known as ResCap) funds single-family rehab and rental investments across the U.S. in several key markets. ResCap is made up of experienced real estate investors and house flippers, which means they know how hard it can be to turn a property around and understand that things don’t always go according to plan. As such, though they typically offer nine-month loan terms, ResCap allows for extensions if needed and doesn’t charge a penalty for early repayment. ResCap also offers 100% financing for purchase and repair costs, up to 70% of the home’s after-repair value (ARV) to a maximum of $1.5 million. If you follow the “70% rule” in house flipping, this means you could purchase an investment property with almost no out-of-pocket costs.
- → Financing: Up to 100% of purchase and repairs, up to 70% of ARV up to $1.5 million
- → Interest rate: 10%
- → Term: 9 months
- → Time to Approval: About 2 days unless pre-qualified
Sherman Bridge Lending
Sherman Bridge Lending offers hard money loans for single-family home investments in more than 15 states. They have an extremely quick and easy pre-approval form on their website, allowing you to find out how much you qualify for in less than 30 seconds. And unlike many hard money lenders, Sherman Bridge also offers a 30-year loan option that carries no prepayment penalty and doesn’t require extension requests. This means you don’t have to pay back your loan until you see the return on your investment—even if it takes longer than you anticipated.
- → Financing: Up to 85% of purchase, up to 70% of ARV
- → Interest rate: Varies
- → Term: Varies
- → Time to Approval: Less than a minute
Finance of America
Finance of America provides real estate investment loans nationwide, with a few exceptions. They welcome both novice and experienced investors to apply, but they offer an additional benefit to real estate veterans. For qualified investors, Finance of America provides fix and flip lines of credit for up to ten million dollars, so you can purchase and flip multiple properties at the same time. This allows you to maximize your potential ROI by taking advantage of hot markets and great deals even if you’re already working on another property. Finance of America also has a minimum interest rate of 6.75%, one of the best in the industry.
- → Financing: Up to 95% of purchase, up to 75% of ARV from $50,000 to $3 million
- → Interest rate: Starts at 6.75%
- → Term: 12 or 18 months
- → Time to Approval: Varies
Lima One Capital
Lima One Capital lends hard money to real estate investors in 41 states and Washington D.C. Rather than requiring a down payment, Lima can use any property you own outright as collateral, which can be a great perk if you’re short on liquid capital. Lima also offers great interest rates to experienced investors—as in, those who have bought and sold at least 24 properties—though their standard rate for first-timers is a little high at 11.5%. Overall, Lima is a great lending resource for very experienced real estate investors who can take advantage of low interest rates.
- → Financing: Up to 90% of purchase and repairs, up to 75% of ARV; can use collateral in lieu of down payment
- → Interest rate: Up to 11.5% depending on experience and credit history
- → Term: 13 months
- → Time to Approval: About a day
RCN Capital offers a variety of loan programs to real estate investors in 44 states. They fund both single-family and multi-family investments for up to 90% of the purchase price and 100% of the renovation costs. RCN provides a clear and simple breakdown of their five real estate loan programs, so even first-time investors should have no problem choosing the right loan. They also offer advice for real estate investors, making RCN an excellent lending resource for newbies. If you’re interested in a long-term rental loan, RCN also offers 30-year terms for single- and multi-family rental properties.
- → Financing: Up to 90% of purchase and 100% of repairs, up to 75% ARV
- → Interest rate: Starts at 7.99%
- → Term: 12 months for single-family, 18 months for multi-family
- → Time to Approval: 48 hours
Bay Mountain Capital
Bay Mountain Capital provides hard money loans in Texas, Tennessee, Georgia, and Oklahoma. They pay up to 100% for single-family and 2-4 unit homes depending on your experience and the scope of the rehab. Qualification is based almost entirely on the value of the property, though to get the best rates you’ll need a good credit score and a real estate investor credibility kit. The best part about Bay Mountain is they can close on properties in one business day, allowing you to get started quickly and build up your portfolio.
- → Financing: Up to 100% of purchase and repairs, up to 75% ARV
- → Interest rate: 9.9%-11.9%
- → Term: 6-12 months depending on experience
- → Time to Approval: 24 hours
Before you choose a lender for your real estate investment, you should do some independent research on the exact loan terms and conditions for the products you’re considering. While most of the information you need is available online, it can be difficult to dig up and confusing for first-time investors who aren’t familiar with short-term financing and real estate legalese. And, when you’ve found a once-in-a-lifetime deal and you’re rushing to secure financing, you may not have the time to thoroughly compare all your options. Luckily, there’s an easier way.
An Easier Way to Find the Best Lenders for Real Estate Investors
Finding hard money loans for my real estate investment properties became much easier when I joined the HomeVestors® network of independent franchises. That’s because I have access to the UGVille® proprietary software platform, which features a lending portal that matches me with reputable hard money lenders. All I have to do is enter in some details about my property, and then I can see which lenders offer the best loan products for my needs. I can also easily compare terms and rates between different lenders, ensuring I always get the best deal. Plus, since I’m backed by the nationally-trusted HomeVestors name, hard money lenders actually compete for my business, so I can sit back and wait for the best offer. That’s why I tell everyone I mentor to consider becoming a HomeVestors independent franchise.
To learn more about how HomeVestors can connect you with the best lenders for real estate investments, contact us today!
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