5 Best Hard Money Lenders in Alabama

Hard money lenders in Alabama are available to help purchase, refinance, and renovate properties.

Key Terms

  • Hard money lenders provide available funds quickly to allow borrowers to purchase, repair, upgrade, and utilize properties throughout Alabama.
  • Borrowers can expect short terms on most hard money loans with higher interest rates but easier qualifications and requirements in most cases.
  • Hard money loans are ideal for fix and flip, rental property purchases, commercial real estate development, and other needs.

Alabama is a beautiful state that sits on the Gulf of Mexico. It’s noted for having more than 1,500 miles of inland waterways that travel into and around the state. It’s the “Heart of Dixie” and a charming, truly Southern style region with a lot of history. There are about 5 million people that live in the state, many of them in large cities like Huntsville, Birmingham or Montgomery. A diverse community of mountainous areas, a large port, and a wide range of dense wilderness areas, it is quite a unique place to live. Known for its intense football rivalries at the college level and its vast economy that’s focused on the automotive, tourism, manufacturing, and aerospace industries, there are a lot of reasons why people want to call it home.

When it comes to the real estate market, Alabama is also quite diverse. The median price of a home in Alabama currently is $318,000, but that is an overall figure that often represents some of the largest communities in the state. There are many areas of Alabama where home values are much lower and even under $100,000. Yet, like much of the rest of the country, home prices are on their way up, and that’s creating significant equity for borrowers.

When it comes to rental real estate, there is a significant opportunity for many investors here. According to data from the U.S. Census Bureau, about 65.5% of people own the homes they live in here, and 34.5% rent them. Keeping that in mind, it’s also important to consider the number of available rentals here. As of recent figures, just 4.1% of rentals in the state are available. That could mean that, in some areas, there is significant demand for rental real estate in Alabama, which is good news to borrowers.

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How hard money loans work

Hard money loans are a specific type of funding that’s distinct from traditional bank loans. Hard money lenders in Alabama are private money lenders like individuals and smaller organizations that lend real estate investors money to purchase properties when other types of loans may not be available or may not provide the financial advantages that the borrower needs. Most of the time, hard money loans are available for hard to finance properties, such as homes that need a significant amount of repair and upgrading. They could also be available to borrowers who are looking for property loans and may not qualify for real estate loans otherwise.

There are a few other differences in hard money loans in Alabama than what you may find in a traditional loan. For example, these loans are typically for a shorter term, which means most of the time, the borrower is securing them and then paying them off within a few years, if not sooner. Most of these loans have a 1 to 5 year term on them, which is much less than what would be expected on a traditional bank loan of 15 to 30 years.

Another key factor is that a hard money loan in Alabama is likely to have a higher interest rate than what is expected on a traditional loan. That interest rate is likely to be competitive, though, because the value of the home secures these loans. If the borrower does not make payments as they promised to do when accepting the loan, the lender is likely to foreclose on the home to take back its property. Keep in mind, too, that these higher interest rates reflect the shorter term of the loan, which keeps costs lower overall.

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5 Top Alabama hard money lenders

If you’re in the market for a real estate investment project in Alabama, consider these hard money lenders that are available for projects in the state.

1. EquityMax

EquityMax is based out of Florida and most of its business in the state but is able to lend throughout the United States. Founded by Brad Emmer in 1990, EquityMax has decades of experience as a hard money lender.

We reached out to EquityMax to learn more about their hard money loans and these are the key highlights that you need to know:

  • Single Family Homes
  • 1-4 Multi-Unit Properties
  • Condos and Townhomes ok
  • Commercial property and Industrial Warehouses OK
  • Direct lender that has decision making over financing deals.
  • Can originate loans to individuals, LLCs, corporations, land trusts and self-directed IRAs.
  • No prepayment penalties
  • No minimum credit score required

When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.

2. Stratton Equities

Stratton Equities is a nationwide direct hard money mortgage lender for real estate investors. Founded by Michael Mikhail in 2017, Stratton Equities has over five years of experience in the private lending market.

We reached out to Stratton Equities to get more information about their hard money financing solutions and here are some highlights:

  • Loan amounts from $100,000 up to $5 million
  • Investment properties only
  • Residential property types like single-family homes, Condos, Townhomes, Multi-Family, Commercial, Mixed-Use, Office, Retail, Industrial and Warehouse are all ok
  • Up to a 75% LTV
  • Rates start at 7.25%
  • Interest only payments
  • Loan terms are 9-24 months
  • Foreign nationals are eligible
  • No prepayment penalty option is available

When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.

3. Perfecto Capital

Perfecto Capital is based out of Boca Raton, Florida and mainly focuses on the Florida market, although they are willing to lend in other states on a case-by-case basis. Started by Lukas Samuels, Perfecto Capital has been in business since 2014 and focuses on residential (1-4 units) and commercial multi-family (5+ units).

We contacted Perfecto Capital to learn more about their private lending business and here are some of the highlights:

  • Up to $2 million per property
  • Loans up to 70% of the property’s after-repair value (ARV)
  • Direct lender with control of its own funds and decision making
  • Residential (1-4 units) and commercial multi-family (5+ units) ok
  • Does not lend on primary residences, co-ops, raw land, mobile homes or other commercial property.
  • Cross-collateralization of properties ok
  • No experience required for most loan programs, however experienced investors and repeat customers may have better terms.
  • No income requirements
  • No credit check
  • New construction financing only available to experienced contractors or builders

When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.

4. HouseMax Funding

HouseMax Funding is based out of Austin, Texas but has a national footprint when it comes to real estate industry lending. Started by Jeff Fetcher and Alex Morris, HouseMax provides asset-based loan financing to investors for real estate transactions.

We reached out to HouseMax to learn more about their hard money loan product and here is what we found:

  • Minimum loan amount is $75,000
  • Lends up to 75% of the after-repair value (APV)
  • 1-3 points origination fees
  • 3 months reserves required
  • Direct lender that approves loans internally and funds using their own private capital.
  • Lends in urban and suburban communities in all 50 states.
  • Goal is to close loans in 10 days or less.
  • Specializes in fix & flip loans, construction loans and rental loans
  • Multi-family and commercial properties are ok

When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.

5. Easy Street Capital

East Street Capital is based in Austin, Texas but lends nationwide except in North and South Dakota. Founded by Stephen Hagerman in 2016, Easy Street Capital has over six years of experience in the real estate investing world.

We reached out to Easy Street Capital to learn more about their hard money loans and this is what we found:

  • Interest rates range from 6.9% – 10.9%
  • Points range from 2-3
  • There is a $1495 document fee
  • No minimum credit score required
  • Down payments of at least 10% required
  • Renovation financing ok
  • Fix and Flip loans do not typically have prepayment penalties

When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.

What are the main advantages of an Alabama hard money loan?

A hard money loan in Alabama could provide a number of benefits to borrowers depending on what their needs are. For those with very good credit and a home that is easily going to appraise for the sale price, these loans may not be ideal. However, for other borrowers, they offer some key benefits.

One of the more unique benefits of these loan types is that they are available at a higher value. Often, the buyer can secure the loan for the after repair value of the home. That means that, for properties like fix and flips, where the home needs a significant amount of repair before it can be sold, the borrower can secure enough to purchase the home and make repairs on it, helping them to get more of the money they need to buy it without as much risk.

Another key benefit of these loans is that hard money loan lenders in Alabama tend to be able to close on the home at a much faster rate than what could be expected with a traditional loan. Most traditional loans take 60 to 90 days to close. For a buyer looking to purchase a home and flip it, that’s too long to wait. With a hard money loan, borrowers are able to get the loan completed within a matter of days to weeks, making it much easier to secure the necessary funding.

There may also be fewer steps in the process. For example, without a doubt, borrowers will need to meet eligibility requirements from lenders, but they may not have to have a high credit score to do so. In addition, the properties do not have to go through as rigorous of an inspection and approval process as is common with traditional conventional and FHA loans.

If you’re looking to explore hard money in other states, check out our national overview of hard money lenders as a starting point in your search.

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Joshua Holt

Joshua Holt is a licensed mortgage loan originator (NMLS #2306824) and founder of Biglaw Investor. His mortgage expertise lies in the areas of professional mortgage loans, particularly for lawyers, doctors and other high-income professionals. Prior to Biglaw Investor, Josh practiced private equity mergers & acquisition law for one of the largest law firms in the country.

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