Finding a Hard Money Lender in New York
In this article, I'll focus on finding a hard money lender in New York State, and I'll also provide some information if you're just looking for hard lenders in New York City.
Hard money lending is a term that most people will not know about until it is needed. And no, it has nothing to do with the level of difficulty for a loan! Hard money lending is defined by Investopedia as being a loan that is secured by real estate property and are therefore quite different to a traditional personal loan. The main differences are:
- Lenders tend to be individuals and businesses (as opposed to banks and financial institutions)
- Creditworthiness of the borrower is rarely considered.
- A physical property (house, land, or business) will be used as collateral.
- Value of the property being used as collateral is the deciding factor for the loan amount.
So why would anyone need or want a hard money lender? The most common purpose for this type of loan is for property flippers to gain capital so that they can renovate or build on an existing property. The idea is that once the building or renovation of the property that the loan is for is complete, then it would be sold for profit (so the loan can be instantly repaid). There is a general agreement that these loans are short term and are for the purpose of real estate investing (so the money is not to be used for a holiday or to purchase a larger TV).
As with any loan, there is always a risk to the lender, and hard money loans are higher risk than traditional loans, so borrowers can expect the costs and fees to be more. But this increased cost is usually considered worth it as the payoff will be larger, and there are fewer hoops to jump through to gain the loan. Approval for hard money loans is much quicker than traditional loans, which is why they are preferred for real estate investing. A quicker turnover for funds is definitely preferred, because as we say in the real estate world – time is money.
The applicant also needs to be aware of the risks of hard money lending. The Balance explains that the collateral for the loan exists in the property, so if it all falls through, they will simply take possession of your property to balance the loan. So, if you are considering taking up a hard money loan, you need to take these factors into consideration. Read the terms and conditions carefully and consider whether the risk is worth it.
Hard Money Lenders in New York
New York is a large state which includes the heavily populated New York City, and with a statewide total population of over 19 million, real estate opportunities are vast and prosperous. So, if you are wanting to invest in New York, where would you start? Hard Money Home is a hard money loan comparison site that can be made specific to New York. Here you can enter your preferences, and it will list the lenders that are suitable. There are 50 hard money lenders in New York City alone, so you will be spoilt for choice.
Choosing a Hard Money Lender
All hard money lenders are similar in that they provide loans for real estate investments; however, they all differ in terms of fees, closing times, loan limits and conditions. Examples of New York-based hard money lenders include:
- Global Capital Partners Fund.
- Loan Fundr.
- Riverside Park Capital.
- CMN Funding.
Whether you are looking to purchase in the middle of Manhattan, or way out in Upstate New York, these companies will be able to offer their assistance.
Conditions of Hard Money Loans
As mentioned previously, each money lender although they operate in a similar way, will have different conditions. Whether it be the amount lent (some will stay under $1 million, while others will lend as much as $100 million), time to close (ranging anywhere from 3 business days to a month), or amount of down payment required (usually a percentage of the loan).
Tips for choosing a hard money lender in New York.
Each individuals’ requirements will be different, so when it comes time to choosing a hard money lender in New York, you will need to spend some time and research each individual lender and make sure that their requirements and conditions match your needs. Finding a hard money lender that is physically based in New York is always going to be preferential, as they will have a greater understanding of the complexities of real estate investment in the state (or the city). Peer Street offers information specific to New York and has built a network of hard money lenders in both New York City and surrounding areas (going as far as Buffalo).
So, no matter where you are from or what your investment history is, if you are wanting to invest in New York City, chances are you will be needing a hard money lender. And choosing a hard money lender in New York will greatly increase your chances of your investment being a financial success.