Hard Money Lenders Greenville, SC: Fast Funding
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Joseph Gordon EditorJoseph Gordon is an Editor with HomeLight. He has several years of experience reporting on the commercial real estate and insurance industries.
Traditional loans aren’t always the best fit for every Greenville investor. That’s where hard money lenders come into play. These lenders offer a unique alternative for those who need quick access to funding, especially in competitive markets where timing is everything.
Whether you’re looking to flip a house on North Main or purchase an investment property near the West End, a hard money loan could be the key to making it happen. This guide will walk you through what hard money loans are, how they work in Greenville, and whether they’re the right option for your real estate needs.
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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 offer short-term loans primarily for house flippers and investors purchasing rental properties. Unlike traditional banks, they focus on the property’s after-repair value (ARV)—the estimated value of a property after renovations. This helps them determine the loan amount, typically offering up to 70-75% of the ARV.
Interest rates for hard money loans are higher than standard loans, reflecting the increased risk and short loan duration. Borrowers also pay points, or upfront fees, which can add to the cost. If a borrower fails to repay the loan, the lender can take ownership of the property, using it to recover their investment.
This type of financing is ideal for those needing quick funds for investments, especially when speed is a factor and conventional loans aren’t an option.
How does a hard money loan work?
In Greenville, hard money loans offer a different approach to real estate financing compared to traditional methods. Understanding how these loans work can help you decide if they’re the right fit for your investment needs.
- Short-term loan: Hard money loans are typically short-term, often lasting 6 to 24 months, making them suitable for quick property flips or renovations rather than long-term investments like a 30-year mortgage.
- Faster funding option: Unlike traditional loans, which can take 30 to 50 days to process, hard money loans can be approved and funded within days, providing fast access to capital.
- Less focus on creditworthiness: Hard money lenders place less emphasis on your credit score and more on the property’s potential, making it easier for borrowers with less-than-perfect credit to secure funding.
- More focus on property value: Lenders prioritize the property’s value and its loan-to-value ratio over the borrower’s financial history, assessing the risk based on the asset itself.
- Not traditional lenders: Hard money lenders are private individuals or companies, not banks, which allows them to offer more flexible terms and quicker approvals.
- Loan denial option: Since these lenders are less regulated, they can deny loans based on their assessment of the property’s risk, even if it doesn’t align with conventional lending criteria.
- Higher interest rates: Due to the increased risk and short-term nature of these loans, interest rates are higher than traditional loans, compensating lenders for the quicker turnaround and potential risks.
- Might require larger down payments: Borrowers often need to provide a significant down payment, sometimes 20%–30% of the property’s value, ensuring the lender has a stake in the project’s success.
- More flexibility: Lenders can offer flexible terms, including negotiating repayment schedules and working with borrowers who might not qualify for traditional financing due to high debt-to-income ratios or lack of home equity.
- Potential for interest-only payments: Some hard money loans allow for interest-only payments, reducing the monthly payment amount until the loan term ends, at which point the full principal is due.
What are hard money loans used for?
Hard money loans can be an effective solution for various real estate scenarios where traditional financing falls short. Here’s a look at different situations where this type of loan can be a game-changer for investors and homeowners.
- Flipping a house: Flipping homes requires quick access to funds for purchasing and renovations. Hard money loans provide the speed and flexibility needed to secure a property, make improvements, and sell it for a profit before the loan term ends.
- Buying an investment rental property: Investors looking to purchase rental properties can use hard money loans to quickly acquire a property in a competitive market. The faster funding allows them to buy, renovate, and start generating rental income faster than with traditional loans.
- Purchasing commercial real estate: When acquiring commercial properties, timing is everything. Hard money loans can facilitate the swift purchase of commercial real estate, enabling investors to capitalize on lucrative opportunities that require fast action, which might not be possible with conventional financing.
- Borrowers who can’t qualify for traditional loans: Those with less-than-perfect credit or high debt-to-income ratios often struggle to get approved for traditional loans. Hard money lenders focus more on the property’s value and less on the borrower’s financial history, making it easier to secure funding.
- Homeowners facing foreclosure: For homeowners in danger of foreclosure, a hard money loan can provide a temporary solution. This financing can help them pay off existing debt or make necessary payments to retain their property, buying time to explore other options.
How much do hard money loans cost?
Hard money loans generally cost more than traditional loans due to the higher risk for lenders and the convenience of quick, flexible funding. Typical costs include:
- Interest rates: 8% to 15% or higher, based on risk assessment.
- Origination fees: 1% to 5% of the loan amount.
- Closing costs: Legal, appraisal, and administrative fees.
- Points: A percentage of the loan amount charged upfront.
Online calculators can help you estimate these costs.
Alternatives to working with hard money lenders
If you’re a homeowner, rather than an investor, who is looking for a way to leverage your current home’s equity, here are a few options to consider:
Take out a second mortgage: If you have substantial equity in your home, a home equity loan or home equity line of credit (HELOC) can provide the needed funds at a lower interest rate compared to a hard money loan.
Cash-out refinance: This option allows you to refinance an existing property, pulling out cash to finance your new investment. It often comes with lower interest rates than hard money loans.
Borrow from family or friends: A personal loan from family or friends can offer flexible repayment terms and potentially lower or no interest rates, making it a more affordable option.
Use a government-backed loan program: Programs offered by the FHA, VA, or USDA can help buyers purchase homes with lower down payments and reduced interest rates.
Peer-to-peer loan: These loans are provided by individual investors through lending platforms like MeridianLink or Funding Circle, functioning similarly to hard money loans but often with different terms.
Specialized loan programs: Consider specialized loans for fixer-uppers or investment property refinancing if you already have a hard money loan and seek to replace it.
Request a seller financing option: In some cases, sellers may agree to finance the purchase themselves, which can result in lower closing costs and less stringent eligibility requirements.
How to buy before you sell
If you’re looking to buy a new home before selling your current one in Greenville, HomeLight’s Buy Before You Sell (BBYS) program offers a streamlined solution. BBYS allows you to leverage your existing home’s equity to make a stronger, non-contingent offer on your next property.
With this program, you can get your equity unlock amount approved in as little as 24 hours, allowing you to move forward confidently with your purchase. Once you’ve bought your new home, you can sell your current property vacant, which often results in a faster sale and better price.
While there is a flat fee of 2.4% of your current home’s sold price, the savings in areas like moving costs and potential discounts on your new home can outweigh this cost. Plus, BBYS fees are typically lower than bridge loan rates, which range from 9.5% to 12%.
Here’s how HomeLight Buy Before You Sell works:
3 top hard money lenders in Greenville
Traditional lenders might not be the solution for every real estate investment. If you’re looking to move quickly and capitalize on an opportunity, explore the hard money lending options available in Greenville.
Lima One Capital
Lima One Capital, based in Greenville, SC, offers new construction, fix-and-flip, rental property, and multifamily loans.
Lending clientele: Residential and development real estate investors
Loan criteria: Loan program terms vary; for instance, FixNFlip loans can cover up to 92.5% of LTC and 75% of LTV, while Bridge Plus loans may offer up to 80% LTV.
Lima One Capital has a 4.0 Google star rating and BBB accreditation since 2013.
limaone.com/south-carolina-hard-money-lender/
800-390-4212
GoKapital
GoKapital is a hard money lender which offers mortgage solutions tailored for both seasoned and novice real estate investors.
Lending clientele: Real estate investors and entrepreneurs
Loan criteria: Up to 75% LTV and 100% of renovation costs
GoKapital has a 4.4 star rating on Google based on 40 reviews. Previous clients praise them for their professionalism and reliability.
886-257-2973
Longhorn Investments
Founded in 2008, Longhorn Investments offers short-term hard money acquisition and renovation capital in major metropolitan areas spanning Texas, Tennessee, Missouri, Indiana, Ohio, Arkansas, Alabama, New Mexico, Georgia, and North Carolina.
Lending clientele: Residential and commercial real estate investors
Loan criteria: Up to 70% of ARV for flips and up to 75% of ARV for rentals, excluding points and fees, with funding not exceeding 100% of the cost. Proof of refinance is required.
Longhorn Investments maintains a 5.0 Google rating from 224 reviews.
214-420-7330
Investing in real estate?
Hire an investor-friendly real estate agent who can help you get access to off-market properties at a discount and assess potential rental income based on market trends. HomeLight can connect you with investment property specialists at no cost.
Should I partner with a hard money lender in Greenville?
Choosing a hard money loan in Greenville should align with your real estate investment goals and financial situation. These loans are ideal for real estate investors who need quick funding for projects like house flips or rental property acquisitions. If you’re ready to handle higher interest rates and shorter terms for the benefit of fast and flexible financing, a hard money loan could be the right move.
For homeowners looking to tap into their home’s equity to purchase their next property, HomeLight’s Buy Before You Sell program offers a compelling alternative. With this program, you can avoid the high costs associated with hard money loans and instead pay a simple flat fee to make a strong offer on your new home.
Ultimately, the right choice depends on your specific needs and long-term plans. Whether you’re an investor or a homeowner, HomeLight can connect you with the right resources and solutions in Greenville.
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