For most real estate investors who buy, rehab, and resell property, there usually comes a time when you need to use hard money to fund a real estate investment. My friend, Jack, who’s new to my stomping grounds of Jersey City, and to this business, is one such person. But, even old hats like me use hard money from time-to-time. Of course, I have the advantage of experience behind me, which means I already know which hard money lenders in New Jersey are right for me and my deals. Plus, I know how to get them to compete for my business so that I can feel confident I’ve gotten the best terms.
But, with less experience as an investor, Jack had less confidence that he’ll choose a hard money lender that he can trust and that will trust him enough to fund his first deals. His concerns were warranted, but won’t necessarily hold him back—especially with me around to make recommendations. When we met at McGinley Square Pub during Happy Hour last week, that’s exactly what I did.
The Best Hard Money Lenders in New Jersey
A hard money loan can provide the kind of terms suited for investing in real estate. Unlike traditional funding options, hard money lenders aren’t afraid to loan on a house that’s in rough shape since they hold the property as collateral, which is why it’s called asset-based lending. Often, your creditworthiness isn’t a big issue, either. Have a potentially profitable deal on your hands is what matters. But, not all hard money lenders offer good terms or have a great reputation. There are several here in New Jersey, however, that do. Here are just some of my top recommendations:
Sherman Bridge Lending
Sherman Bridge Lending loans as little as $50,000 to as much as $1 million for the purchase of single-family homes as investment property. And, they’ll fund up to 70% of the After Repair Value (ARV). Loan terms and fees will vary, as will your interest rate, depending on whether you’ve just started your career as a real estate investor or have been at it a while, like me. Great credit and considerable cash reserves will help secure better rates, though—even if you don’t have many properties under your belt. Either way, you can get pre-qualified in about 30 seconds by applying right on their website. If you like the terms and want to move ahead, they can close fast, too—in about seven days. That potentially makes buying your investment property easy. But, if it’s the renovation you’re worried about—especially on your first deal—Sherman Bridge offers a 30-year loan that doesn’t require extension requests or come with early payoff penalties. It’s an unusual move for a hard money lender, which is one of the reasons I like them.
RCN Capital provides hard money loans in amounts ranging from $50,000 to $2.5 million. They will even consider loaning more if you’re diversifying your real estate portfolio with a large multi-family building. And, they’re willing to cover as much as 75% of the property’s ARV. Interest rates start at only 7.99% and go to 10.99%, depending on your level of experience. And, you’re only charged interest on the money you’ve actually drawn. Loan terms are 12 months, but you can extend for another six if your rehab is delayed or you can pay the balance off early—without penalty—if it runs smoother than expected. They work with investors of all skill levels, give advice on how to quickly build a property portfolio on their blog, and are as transparent as they come.
Finance of America
Finance of America also lends anywhere between $50,000 and $2.5 million, up to 75% of the property’s ARV. And, their interest rates start as low as 6.99%. So, if you’ve bought multiple investment properties in your day, you can expect to be rewarded with a rate that reflects your experience. That’s not the only benefit you can receive, either. Finance of America provides lines of credit for as much as $10 million to investors, like me, who are already buying, renovating, and selling several houses a year. So, you can set up your funding source once and use the rest of your time to focus on finding the deals. But, they will loan to new investors, too. And, you’ve got to start somewhere. With 12-month terms, no prepayment penalty, and an incentive to work towards some of the best rates in the biz, there’s no reason not to start here.
Not only will all of these companies consider loaning you funds wherever you buy investment property in New Jersey, but they’re each also one of the most reputable hard money lenders nationwide. They’re known for their competitive terms, transparency, and ethical business practices. So, you can trust that they have your interests in mind when they fund your deal. And, to me, that’s as critical as getting a good rate.
Of course, since every deal is as potentially different as every investor, what works for you today may not work for you tomorrow—especially as you gain experience and build up your equity. That’s where having access to several lenders simultaneously for every house you want to buy comes in handy. Imagine being able to compare rates from competing lenders like these, all together at one time, so you can get a deal done faster. Luckily, you don’t have to imagine it. That technology is already here and I’ll tell you, like I told Jack, where to get it.
How to Get the Best Terms for Your Deal
It seems like ages ago that I used to look up hard money lenders, call to ask for terms, fax over my application, and cross my fingers. Thankfully, those days are long gone for me. As an independently owned and operated HomeVestors® franchisee, I have access to some of the best real estate investment tools and resources. And, recently, getting the best terms from reputable companies has gotten even easier thanks to a new lending portal in HomeVestors®’ proprietary lead management software, UGVilleSM. This portal connects me with vetted lenders who, then, compete for my business. I just enter information about the property, hit a button, and, before you know it, I have hard money options. And, when you want the best terms for your deal, having options is always a good thing.
Whether you’re a new investor, like Jack, looking to fund that first property or an old one, like me, who invests in several per year, being a HomeVestors® franchisee offers a leg up. To see how you can have some of the best hard money lenders in New Jersey compete for your business, too, call HomeVestors today.
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