Hard money loans are one of the best ways for real estate investors to get fast cash, giving them a critical edge in a fast-paced industry. Because the loans are private and backed by equity, they also come with less stringent credit requirements. The key is to find a reliable lender that can move quickly.
Hard Money Loans 101
If you’re new to the world of private lending, start by learning the basics.
What Are Hard Money Loans?
Hard money loans differ from traditional loans in that they aren’t subject to the same regulations that banks must follow. Often used to get cash for real estate investments because they close faster and have more flexible terms, hard money loans are ideal for investment properties.
What Are the Advantages of Hard Money Loans for Real Estate Investors?
Real estate investors turn to hard money loans in Sacramento for a number of reasons, including speed of approval, flexibility in terms, and the ability to finance projects that might not qualify for traditional financing.
For example, if you find the perfect fix-and-flip in Sacramento, you might not be able to beat out the cash competition with a slow bank loan. Even if you had the time, you might not be able to get a bank loan if the property doesn't meet certain standards. A private lender can provide the funds to purchase and improve the property so you can make a profit.
Key Factors to Consider When Choosing Hard Money Lenders in Sacramento
Choosing any type of lender is a major decision, and hard money is no exception. Look for these qualities as you explore your options in Sacramento:
Reputation and Reliability
The importance of choosing a lender with a strong reputation in Sacramento can’t be understated. You want to build a relationship with your lender—especially if you intend to do multiple real estate deals. Working with a direct lender rather than a broker is a great way to do this while also saving on broker fees. When comparing your options, read customer reviews, check with the Better Business Bureau, and look at completed projects in the area to get a sense of each lender’s reputation.
Examining Loan Terms and Interest Rates
Compare interest rates and terms between different hard money lenders in Sacramento to determine which deal is right for you. If you’re not confident you can complete your project within the time specified by the loan term, ask for different terms. Consider the whole cost of the loan, including fees, loan-to-value ratio, monthly payments, interest, and any other associated costs.
Licensing and Experience
Any lender you’re considering should be licensed to operate in California. You should also verify their track record and experience with specific types of real estate projects in Sacramento. Ask for specific projects they have financed so you can perform due diligence and speak to references.
Why Choose Socotra Capital as Your Hard Money Lender in California?
Comparing multiple lenders is always a good idea. Include Socotra Capital in your comparison to get a better understanding of benefits such as:
Competitive Rates and Terms
Socotra Capital offers competitive rates and flexible terms, catering specifically to the needs of real estate investors in Sacramento. Every loan is unique, so we work through your specific scenario to structure a loan that best sets you up for success.
Experience and Expertise in the Sacramento Market
With deep understanding and extensive experience in the Sacramento real estate market, Socotra Capital is uniquely poised to finance your next project. As John Leonard of Sacramento-based Leonard Development company said, “No matter where on the complexity range your project falls, you can bank on the focus and expertise of this group. The more challenging the project, the higher the probability of success.”
Fast Processing and Ease of Approval
Socotra Capital streamlines the application process with a simple online form and fast approvals that help investors seize opportunities quickly—sometimes in as fast as five days. Compared to the slower processes of traditional banks, which take at least a month, hard money with Socotra Capital is the clear winner. Our fund is a real estate investment trust and we do everything in-house, including underwriting, document drawing, and servicing, which allows for speed and reliability.
Take the Next Step with Socotra Capital
If you’re looking for the best hard money lender in Sacramento, Socotra Capital stands out in this competitive market. We’re experienced, proven partners with a strong record in California real estate lending, and we’re eager to connect with you.
If you’re a first-time real estate investor or have a less-than-perfect credit score, don’t be discouraged. Call us with questions at 855-889-7626, or if you’re ready to get started, apply online.
Want to learn more? Check out The Borrower Guide to Process, Preparedness, and Timeline.
