Miami Hard Money Lenders: Fast, Flexible Loans
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Kelsey Morrison Former HomeLight EditorClose
Kelsey Morrison Former HomeLight EditorKelsey Morrison worked as an editor for HomeLight's Resource Centers. She has seven years of editorial experience in the real estate and lifestyle spaces. She previously worked as a commerce editor for World of Good Brands (eHow.com and Cuteness.com) and as an associate editor for Livabl.com. Kelsey holds a bachelor’s degree in Journalism from Concordia University in Montreal, Quebec, and lives in a small mountain town in Southern California.
Looking to kickstart your next real estate project in Miami with a hard money loan? These loans can be used for various property types, from fixer-uppers in Little Havana to condos in Brickell intended for long-term rentals. Hard money lenders are known for their fast and flexible financing options, which can be appealing to investors and homeowners who need to secure funds quickly and avoid the lengthy approval process of traditional loans.
In this guide, we’ll cover everything you need to know about hard money lending in Miami. We’ll explain what hard money loans are, their costs, and their benefits. Whether you’re flipping houses, investing in rental properties, or dealing with foreclosure, we’ll help you determine if working with a hard money lender is the right choice for your real estate goals.
Start Making Offers Without Waiting to Sell Your Home
Through our Buy Before You Sell program, HomeLight can help you unlock a portion of your equity upfront to put toward your next home. You can then make a strong offer on your next home with no home sale contingency.
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?
A hard money lender is a private individual or company that offers short-term loans secured by real estate. Unlike traditional lenders, who focus oh a borrower’s credit score and income, hard money lenders in Miami place more importance on the value of the property. They typically work with real estate investors, including house flippers and those purchasing rental properties, who need quick and flexible financing.
Hard money lenders determine loan amounts based on the after-repair value (ARV) of the property, which is the estimated worth of the property after renovations and repairs. They usually lend a percentage of the ARV to make sure the investment remains profitable and secure.
These loans often come with higher interest rates, ranging from 8% to 15%, and shorter repayment terms, typically 6 to 24 months. Costs can include origination fees, closing costs, and points. If a borrower fails to repay a hard money loan, the lender can seize the property to recoup their investment.
How does a hard money loan work?
If you’re a real estate investor searching for a financing option with speed and flexibility, hard money lenders in Miami could be the solution you need. Here’s a breakdown of how hard money loans work:
- Short-term loan: Hard money loans typically have a repayment period of 6–24 months, unlike the extended 15- or 30-year terms of conventional mortgages. Some lenders may offer termsof up to 36 months if necessary.
- Faster funding option: These loans can be approved in days, providing funds much quicker than the usual 30 to 50 days required for traditional mortgage loans.
- Less focus on creditworthiness: Hard money lenders place less emphasis on your credit score or income, focusing instead on the property’s value.
- More focus on property value: The loan amount is determined based on the property’s loan-to-value ratio, using the property as collateral.
- Not traditional lenders: Hard money loans are provided by private investors or companies, not traditional banking institutions.
- Loan denial option: These loans are suitable for individuals with poor credit who have been denied conventional loans but have substantial home equity.
- Higher interest rates: Hard money loans come with higher interest rates due to the increased risk, compared to traditional mortgages.
- Might require larger down payments: Borrowers may need to put down a significant amount, sometimes between 20%–30%, depending on the property’s value.
- More flexibility: These loans offer more flexible terms and less stringent debt-to-income (DTI) requirements, often helping borrowers avoid foreclosure.
- Potential for interest-only payments: Hard money loans might allow for initial interest-only or deferred payments, unlike conventional loans.
What are hard money loans used for?
Hard money loans cater to specific needs within the Miami real estate market, often benefiting investors and homeowners who need quick financing or don’t qualify for traditional loans. Here’s a look at common uses for hard money loans:
Flipping a house: For Miami house flippers, hard money loans provide quick access to funds for purchasing and renovating properties. These loans enable flippers to acquire homes, complete renovations, and sell them for a profit in a short period.
Buying an investment rental property: Investors looking to buy rental properties can use hard money loans to secure properties quickly, especially those needing immediate repairs. This allows landlords to renovate and start generating rental income faster than with traditional bank loans.
Purchasing commercial real estate: Hard money loans are great for commercial real estate deals because they offer flexibility and fast approval. They’re particularly useful when you need to secure a property quickly to take advantage of a good investment opportunity.
Borrowers who can’t qualify for traditional loans: Individuals with significant home equity but poor credit often turn to hard money lenders. These loans are asset-based, making them accessible for those who cannot secure traditional financing.
Homeowners facing foreclosure: Homeowners at risk of foreclosure may use hard money loans to refinance their debt or buy time to sell their property. This provides a temporary solution to avoid losing their home and damaging their credit.
How much do hard money loans cost?
The cost of hard money loans is higher than traditional loans due to the increased risk and convenience of fast funding. Here are some typical costs:
- Interest rates: These can range from 8% to 15%, depending on the lender’s risk assessment.
- Origination fees: Lenders may charge 1% to 5% of the total loan amount as an origination fee.
- Closing costs: Additional fees at closing can include legal fees, appraisal fees, and other administrative costs.
- Points: Lenders might charge points (a percentage of the loan amount) upfront, adding to the initial cost of the loan.
There are many online calculators you can use to estimate your costs.
Alternatives to working with hard money lenders
If you’re a homeowner looking to leverage your current home’s equity, here are a few alternatives to consider:
Take out a second mortgage: If you have significant equity in your home, a home equity loan or HELOC can provide the necessary funds at a lower interest rate compared to a hard money loan.
Cash-out refinance: This option allows you to refinance your existing property, pulling out cash to finance a 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 assist in purchasing homes with lower down payments and reduced interest rates.
Peer-to-peer loan: These loans are provided by individual investors through lending platforms. They function similarly to hard money loans but often have different terms.
Specialized loan programs: If you already have a hard money loan and want to replace it, consider specialized loans for fixer-uppers or investment property refinancing.
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
Stumbling upon the perfect listing can happen when you least expect it. Whether it’s an adorable bungalow in Coral Gables or an industrial loft in Downtown Miami, the timing might not always align with selling your current home. If you’re a Miami homeowner eager to buy a new home before selling your current one, HomeLight’s Buy Before You Sell (BBYS) program can make the transition smoother.
With the Buy Before You Sell program, you can leverage the equity in your existing home to present a stronger, non-contingent offer on a new property. If your home qualifies, you can get your equity unlock amount approved in 24 hours or less, without any upfront cost or commitment. This allows you to purchase your next home first and sell your current one vacant, simplifying the moving process.
Here’s how HomeLight Buy Before You Sell works:
The program charges a flat fee of 2.4% of your home’s sold price. However, you could save on moving expenses, temporary housing, and possibly the purchase price of your new home. Additionally, HomeLight’s BBYS fees are typically much lower than bridge loan interest rates, which can range from 9.5% to 12%.
3 top hard money lenders in Miami
Traditional lenders might not always suit every real estate investment. When you need to move quickly on a promising opportunity, consider these top-rated hard money lenders in Miami.
Hard Money Lenders IO
Based in Miami, Hard Money Lenders IO is a private lending company specializing in loans for real estate investors and entrepreneurs. Whether you’re looking to buy, renovate, or build residential real estate, they can provide you with quick funding and flexible conditions. Some of the company’s loan programs include fix-and-flip loans, rental property loans, new construction loans, commercial loans, and bridge loans. Terms range from three months to six years, and interest rates are typically around 10%–15%.
Lending clientele: Real estate investors and entrepreneurs
Loan criteria: Up to 75% ARV for most loan programs
Hard Money Lenders IO maintains a 4.9-star rating on Google. Clients commend the employees’ professionalism, exceptional customer service, and transparency. “Working with Yuval and Hard Money Lenders was a smooth and easy process!” reads a recent review. “Great communication and great deliverance of a loan in less than 2 weeks! We’ll definitely use them for more loans!”
786-475-7691
GoKapital
GoKapital is headquartered in Miami and offers a variety of real estate financing options, including hard money fix-and-flip loans, commercial real estate mortgages, cash-out refinancing for investment properties, financing for foreign nationals, and more. Their hard money loans can close in two to four weeks and rates start from just 7%. Listed among the eligible properties are single-family homes, multi-family properties, mixed-use developments, retail and restaurants, office buildings, and warehouses.
Lending clientele: Residential and commercial real estate investors
Loan criteria: Up to 75% LTV and 100% of renovation costs
GoKapital touts a 4.4-star rating on Google. They have been accredited by the Better Business Bureau since 2016 and hold an A+ rating. Previous clients praise them for their quick turnaround, helpful nature, and willingness to find solutions. “Great local private lender in Miami,” wrote one reviewer. “They answered all my client’s questions, and we were able to close before the expected date. Highly recommended!”
886-257-2973
Benworth Capital
Located in Coral Gables, Benworth Capital has been in business since 2008. They offer three types of hard money loans: residential mortgage, commercial mortgage, and refinance. Borrowers can get approved in 24 hours, and loans can be funded in a matter of days. Benworth Capital will consider lending on residential and commercial property in Florida, including single-family homes, commercial properties, vacant land, and industrial properties.
Lending clientele: Real estate investors, homeowners, and international borrowers
Loan criteria: Up to 65% LTV
Benworth Capital has a 4.7-star Google rating based on over 2,000 reviews. Although they are not BBB-accredited, they still hold an A+ rating. Reviewers praise Benworth Capital for their transparency, flexibility, and efficiency. “Working with Benworth has been an absolute game-changer for me!” shared a former client. “From the very first interaction, their team was incredibly professional, knowledgeable, and understanding of my financial needs.”
305-676-9632
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 Miami?
Deciding whether a hard money loan is right for you depends on your specific situation and real estate goals in Miami. Hard money loans are best suited for real estate investors who need quick access to funds for projects like flipping houses or purchasing rental properties. These loans offer fast, flexible financing but come with higher costs and shorter repayment terms.
If you’re a homeowner looking to leverage your equity, consider HomeLight’s Buy Before You Sell program as an alternative. Instead of facing high interest rates, you’ll pay a small flat fee and benefit from making a competitive offer on your next home while simplifying the moving process.
For real estate investors in Miami, hard money loans can provide the necessary speed and flexibility to act on valuable opportunities. However, you should always consider the higher costs and consult with a financial advisor to ensure this financing option aligns with your long-term investment strategy. To connect with investor-friendly real estate agents and access trusted hard money lenders, let HomeLight introduce you to top professionals in Miami who can help you achieve your goals.
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