California Hard Money—the Basics and things to Consider

iStock_000002041548Medium (1)California hard money lenders are not lenders to be fearful of rather they are lenders you should definitely learn more about. In many ways, hard money requirements and regulations are the same no matter where you go but it does know the basics for the state your potential commercial property is located in.

If you are like many business entrepreneurs you may have just started figuring out what your loan options truly are and that’s perfectly okay. In general, hard money loans are, in their purest form, short-term loans that use real estate as collateral. This means, in order to obtain a California hard money loan you need to aware of the value of the commercial property you are interested in or if you want to secure this particular kind of loan with a commercial property you already own instead, you also need to know that value.

Obviously, the reason the value of your potential property or current property that you want to use as collateral matters because California hard money lenders, just like other hard money lenders, are more interested in the value of the proposed property versus your credit. With that being said, there aren’t necessarily specific types of property you must use for a hard money loan i.e. industrial property, commercial land, multi-family homes and so on are all okay for the purpose of collateral.
Now that you know what kind of property is good collateral for hard money loans, let’s address when it is the idea situation for these particular kinds of loans. As you know hard money lenders are your best option when traditional avenue are not (due your credit or the timeframe in which you need the financing for); thus, the ideal hard money situation includes land loans, construction loans, fix and flips or simply you need to move quickly on a property.

The Real Deal When Dealing with Hard Money

Now that you are clear on some of the basics, you may be asking yourself is hard money right for your particular venture? Well, only you can truly answer that question for sure. But, if you have less than prefect credit, need to move on a property within a week or two or simply have been rejected already by traditional banks then you’ve more than likely come to the right place—hopefully with a detailed business plan in hand.

Before Moving Forward

Nevertheless, before you move forward with your hard money options, it is important to take into consideration the true price of obtaining financing when you need it and in spite of your credit. In other words, make sure you compare interest rates and are fully apprised of your loan to value ratios. The good news is that California tends to have lower rates due to the almost overwhelming number of hard money lenders. Lastly, make sure that your future business venture falls in line with the loan amount that is available i.e. most hard money lenders will lend anywhere from 65-75% of the current value so be conscious of that fact going in.

Level-4-Funding-Dennis-Dahlberg-Mort[1]Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
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About the author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true.

Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.