Hard Money Lenders Sacramento: Quick Funding Options
Looking to finance your next property endeavor in Sacramento with a hard money loan? Whether it’s flipping a charming Victorian in Land Park or purchasing an investment property in Oak Park, hard money lenders can offer the speedy and flexible financing solutions you need. Hard money loans are ideal for projects with tight deadlines or when traditional loans are not an option due to credit issues.
This comprehensive guide will walk you through the basics of hard money lending in Sacramento, from how these loans function to their various uses and costs. We’ll also discuss alternative financing options for homeowners hoping to leverage their equity, helping you find the best path to achieve your real estate goals.
Editor’s note: This post is for educational purposes and is not intended to be construed as financial advice. HomeLight always encourages you to consult your own advisor.
What is a hard money lender?
A hard money lender is a private entity that offers short-term loans backed by real estate. These lenders in Sacramento prioritize the property’s value over the borrower’s financial history, making them an attractive option for house flippers and real estate investors buying rental properties.
They determine loan amounts based on the after-repair value (ARV) of the property — the estimated worth after renovations are complete. Typically, they lend a percentage of this ARV to mitigate risks.
Hard money loans often come with higher interest rates, usually between 8% and 15%, and additional fees like origination and closing costs. If the borrower defaults, the lender can take possession of the property to recover their funds.
How does a hard money loan work?
Real estate investors in Sacramento looking for quick, short-term financing, may find hard money loans to be a good choice. Here’s a breakdown of how these loans operate:
