Hard Money Lenders Nashville: Secure Your Next Deal
Looking to kickstart your next real estate project in Music City with a hard money loan? Whether you’re planning to flip a Craftsman bungalow in East Nashville or invest in a rental property in The Gulch, hard money lenders in Nashville can offer the flexibility and quick turnaround times that traditional loans often can’t match. A hard money loan is particularly useful for those needing fast access to cash or dealing with credit challenges.
For homeowners not involved in real estate investing but needing to bridge the gap between buying and selling, we’ll explore some alternative financing solutions. In this article, we’ll introduce you to the basics of hard money lending in Nashville, helping you decide if this financial tool aligns with your real estate investment or home-buying 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?
Hard money lenders are private individuals or companies offering short-term loans secured by real estate. Unlike traditional lenders, who base their decisions on the borrower’s credit score and income, hard money lenders focus on the property’s value. They commonly serve house flippers and buyers of rental properties who need fast and flexible financing solutions.
The loan amount is determined by the after-repair value (ARV), which is the estimated value of the property after all planned renovations and repairs. Typically, hard money lenders will lend a percentage of this ARV to protect their investment.
These loans have higher interest rates, often falling between 8% and 15%, and shorter repayment terms, usually from 6 to 24 months. Borrowers should also expect origination fees, closing costs, and points. If the borrower fails to repay, the lender can foreclose on the property to recover their investment.
How does a hard money loan work?
For those considering a hard money loan in Nashville, it’s important to understand the mechanics of how these loans work. Here’s a brief overview of the key features of hard money loans:
