Hard Money Loans in California

Hard money lenders in California are designed to make investing in real estate more accessible.

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7 Best Hard Money Lenders in California

Key Terms

  • California’s best hard money lenders provide exceptional access to credit to buy real estate, often with loans with shorter terms.
  • Use hard money loans for fix and flip projects, rental property investments, and commercial real estate projects.
  • The top California hard money lenders provide a range of lending options and help investors capitalize on the demand for rental property in the state.

With nearly forty-million residents, California is a large state with some of the largest cities, including Los Angeles, San Francisco, and San Diego. Located on the western coast, California residents enjoy a mild climate throughout the year. A state with a $3.2 trillion economy, it’s perhaps best known for its tourism industry, media and film production, and its role in pop culture.

California also has one of the country’s most robust and high-value real estate markets, especially in the Los Angeles and San Francisco Bay areas. The median sold price of a single-family home in California is $863,790. The median sold price for a condo or townhome is $660,000. Meanwhile, the median sale price in the San Francisco Bay area is $1.4 million, while in Los Angeles it is $800,000. The region is only second in terms of home value after New York City.

In California, 54.6% of people own homes, and 45.4% of people rent. That is a significantly large number of renters, which may be because home prices in the state are so high. Considering that just 4.1% of rentals are vacant, there may be a demand for more rental properties in some areas, according to the U.S. Census Bureau data. With significant demand for homes for rent, it may be beneficial to consider buying to rent here.

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How hard money loans work in California

A hard money loan enables the purchase of real estate, where the property is the security for the loan. That means if the home buyer defaults on the loan, the lender can force the sale of the home through foreclosure to get its money back. These particular loans are typically available to those who want to buy real estate fast and efficiently. Though hard money loans typically have higher interest rates, they are easier to obtain by those who have less-than-perfect credit but the income and means to repay the loan. A conventional loan process might not be a fit, either, leaving a borrower with limited options to get the funds they need.

Because they are asset-secured loans, hard money lenders are typically willing to lend to those who are higher risk borrowers. Unlike traditional conventional real estate loans, these loans are typically for a shorter amount of time, usually between 1 and 5 years. They work well as loans for rehabbing homes or bridge loans until another, longer term loan is secured. Borrowers may wish to obtain a hard money loan to buy, fix, and resell a property, for example. They may also be useful for the purchase of rental property if the buyer wants to secure that home quickly.

Lenders charge a bit more for hard money loans because there is more risk to them in lending. Rates differ significantly from one lender to the next, but they may be between 8% and 15%, but again, they are not meant to be used long term. Rather, the higher interest rate helps lenders earn some money on the transaction even though that loan may only last a few years. These lenders still look at credit qualifications, income, and other factors before making the decision to lend, but they have fewer and less stringent requirements than traditional mortgage loans do, and that makes these loans highly attractive for many reasons.

Always ready through the loan application to learn important information about each lender, such as their escrow requirements, loan to value ratio, which kinds of residential properties are supported, and other issues connected to California real estate. Doing your research will help you feel confident that you’ve selected the right hard money lender for your needs.

While there are many loans out there, such as bridge loans, construction loans, traditional loans, flip loans, rehab loans, and more, you need to sort through the pros and cons of each one of these to decide if a hard money loan is a better fit for your needs. This way once you find a perfect property in Northern California or Southern California on the NMLS, you already know what’s needed to help you secure the funds for the purchase price. Each lender comes with their own requirements on docs, credit score, and more.

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7 Top California hard money lenders

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

1. North Coast Financial

North Coast Financial is a direct hard money lender in California with over 40 years of experience. They offer a wide range of financial products, including bridge loans, trust loans, probate loans, fix and flip loans.

We contacted North Coast Financial, Inc to learn more about their private lending business and here are some of the highlights:

  • Requires significant down payment in the 25-30% range
  • Borrower must demonstrate that they have funds for loan payments, taxes, insurance and other holding costs
  • Must have exit strategy for property

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. New Silver

New Silver started in 2019 by Kirill Bensenoff and Alex Shvayetsky. They offer a variety of private money lending products like fix and flip, rental, ground up and personal loans.

We contacted New Silver Lending to learn more about their private lending business and here are some of the highlights:

  • Origination fee from 1.875%
  • Loan to cost up to 90%
  • 100% construction financing available
  • Loan to ARV up to 80%
  • Terms are typically 24 months
  • Loan amounts are from $100,000 to $5 million
  • Minimum FICO score is 650
  • No hard credit pull 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.

3. 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 lending program 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 charge
  • 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 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.

4. 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.

5. Stratton Equities

Stratton Equities is a nationwide direct hard money 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 lending program and here are some highlights:

  • Loan amounts from $100,000 up to $5 million
  • Investment properties only
  • Single-Family, 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.

6. LendSimpli

LendSimpli is a hard money lender based in Tampa, Florida. They can lend nationally in most states but may not be able to lend if the property is in a rural area. Founded by Brenden Crampton and Matthew Davies in 2018, they have nearly four years of experience in the private lending real estate investing market.

We reached out to LendSimpli to get more details about their bridge loan product and this is what we found:

  • Loan amounts up to $5 million for 1-4 unit properties
  • Loan amounts up to $20 million for 5+ unit properties
  • Single family (1-4 units)
  • Multifamily (5-20 units)
  • No owner-occupied properties
  • Loan terms 12-24 months
  • Interest-only payments with rates starting at 8.50%
  • Max LTC is 90% of project costs
  • Minimum credit score is 660
  • Prefer that you have at least two transactions in the past three years

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.

7. 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.

What are the main advantages of a California hard money loan?

For those thinking about using a hard money loan, it is helpful to understand what your goals and needs are. For those with very good credit, high income, and a large down payment, a hard money loan may not be the ideal choice. However, for those who have other qualifications, these loans may be one of the best opportunities.

One of the key reasons for this is that hard money loans are more readily available for the high-value and higher risk homes in California. These lenders are more willing to provide people who have less than desirable credit with access to the loans they desire, which could make a considerable difference in their financial health going forward.

Hard money loans may be beneficial to borrowers who are looking for a way to borrow money to buy a property to flip it, such as buying it and then repairing or upgrading it to sell it for a higher value. These investors may not want to use their personal savings to put into a property like this, or at least not as much of it. For that reason, hard money loans provide them with access to the cash they need to invest in not just the home but also the repairs needed. Then, they can pay off the loan when they sell it.

Another key benefit is that these loans can close quickly, often in a matter of weeks. Some are less stringent about the condition of the home, noting that the investor may be planning to upgrade it. In the case of investment properties that owners plan to maintain long-term, these loans provide a way to secure the home quickly, based on the expected after repair value of the home, and then replace the loan with a lower interest rate loan later.

For those who are looking for a way to invest in commercial real estate development, where they will eventually sell the property, this type of loan provides a faster way of obtaining those funds as well.

Looking for a hard money lender in a different state?

If you want to find the best hard money lenders in other states, click on your state below.

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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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