Hard Money Lenders NC: Get Fast Cash
- Published on
- 10 min read
-
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.
Are you a real estate investor in North Carolina seeking quick funding for your next project? Whether you’re flipping a Craftsman bungalow in Durham or securing a commercial property in Greensboro, hard money loans can provide the financial boost you need. These loans cater to investors who require fast funding and more flexible terms than traditional financing options.
In this article, we’ll explore the ins and outs of hard money lending in NC. You’ll learn about the benefits and potential drawbacks of these loans, as well as alternative financing methods to consider. We’ll also highlight HomeLight’s Buy Before You Sell program, which offers an innovative solution for homeowners wanting to tap into their equity without the stress of traditional selling timelines.
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.
What is a hard money lender?
Hard money lenders are private investors or companies offering short-term, asset-based loans, usually secured by real estate. Unlike traditional lenders who focus heavily on credit history, hard money lenders emphasize the value of the property being used as collateral. Their clients often include house flippers and real estate investors purchasing rental properties.
Loan amounts are based on the after-repair value (ARV) of the property, or the estimated worth post-renovation. Hard money lenders typically offer a percentage of this value to protect their investment.
These loans come with higher interest rates, usually between 8% and 15%, and various fees, such as origination and closing costs. If a borrower defaults, the lender can take possession of the property to recoup their funds.
How does a hard money loan work?
For real estate investors in North Carolina needing quick and flexible financing, hard money loans can be a great option. Here’s an overview of how they work:
- Short-term loan: These loans typically have a repayment period of 6 to 24 months, much shorter than conventional 15- or 30-year mortgages.
- Faster funding option: Approvals for hard money loans can be completed within days, unlike traditional mortgages, which can take 30 to 50 days.
- Less focus on creditworthiness: Approval is less dependent on your credit score and more on the property’s potential value.
- More focus on property value: The amount you can borrow is based on the loan-to-value ratio of the property used as collateral.
- Not traditional lenders: These loans are provided by private investors or companies rather than traditional banks.
- Loan denial option: Ideal for those who have been denied traditional loans due to poor credit but have significant home equity.
- Higher interest rates: Hard money loans come with higher interest rates due to the increased risk.
- Might require larger down payments: Borrowers may need to fork over a larger down payment, sometimes up to 20%–30%.
- More flexibility: These lenders offer flexible terms, including different debt-to-income requirements.
- Potential for interest-only payments: Some hard money loans may allow for interest-only or deferred payments initially.
What are hard money loans used for?
Hard money loans address specific financial needs in North Carolina’s real estate market, offering a solution for investors needing fast funding or those who struggle with traditional financing. Here are some common uses for these loans:
Flipping a house: Investors in North Carolina who use hard money loans to flip homes benefit from quick access to funds. This allows them to purchase, renovate, and resell properties quickly, capitalizing on market opportunities.
Buying an investment rental property: Those looking to buy rental properties can leverage hard money loans to acquire and renovate homes that need immediate attention. The fast funding process helps investors prepare the properties for tenants and start generating rental income more quickly.
Purchasing commercial real estate: Hard money loans are a popular choice for purchasing commercial real estate because of their flexibility and speedy approvals. When time is of the essence, these loans allow borrowers to secure properties quickly.
Borrowers who can’t qualify for traditional loans: Individuals with substantial home equity but poor credit or other disqualifying factors sometimes turn to hard money lenders for assistance. With hard money loans, qualification is determined more by the asset’s value than the borrower’s credit score.
Homeowners facing foreclosure: Homeowners nearing foreclosure may use hard money loans to refinance their debts or buy time to sell the property. This can provide a temporary solution to avoid losing their home or a foreclosure mark on their credit report.
How much do hard money loans cost?
Hard money loans often come with higher costs due to the flexibility and speed they offer. Common expenses include:
You can use online calculators to help estimate these expenses.
Alternatives to working with hard money lenders
Homeowners seeking to access the equity built up in their homes may want to consider the following alternatives to hard money loans:
Take out a second mortgage: A home equity loan or HELOC can provide needed funds at lower interest rates than hard money loans.
Cash-out refinance: This method allows you to refinance your property and take out cash, often at more favorable rates.
Borrow from family or friends: Personal loans from family or friends can offer more favorable repayment terms and lower interest rates.
Use a government-backed loan program: Programs like FHA, VA, or USDA loans can help purchase homes with lower down payments and reduced interest rates.
Peer-to-peer loans: Individual investors provide loans through platforms like Funding Circle, offering slightly different terms than hard money loans.
Specialized loan programs: Look into loans for fixer-uppers or refinancing current hard money loans for better rates and terms.
Request a seller financing option: In some instances, sellers may finance the purchase, reducing closing costs and easing eligibility requirements.
How to buy before you sell
Finding the perfect home can happen when you least expect it. Maybe it’s a modern mountain retreat in Asheville or a Cape Cod-style cottage in Winston-Salem. If you’re a North Carolina homeowner wanting to buy a new home before selling your current one, HomeLight’s Buy Before You Sell program can make it easier.
With HomeLight’s Buy Before You Sell program, you can leverage the equity in your current home to make a non-contingent offer on your next property. Qualifying homes can get their equity unlock amount approved within 24 hours with no upfront cost or commitment. This allows you to purchase your new home first, then sell your current home vacant, allowing you to avoid the dreaded double-move.
Here’s how HomeLight Buy Before You Sell works:
Although there is a flat fee of 2.4% of your current home’s sold price, the potential savings can be substantial. You could save on moving expenses, temporary housing, and possibly secure a lower purchase price on your new home. Plus, HomeLight’s BBYS fees are typically lower than bridge loan interest rates, which range from 9.5% to 12%.
3 top hard money lenders in NC
Traditional lenders aren’t always the best fit for every real estate deal. If you need to move quickly to take advantage of a great opportunity, consider partnering with one of these top-rated hard money lenders in NC.
Loan Mountain Capital
Based in Charlotte, Loan Mountain Capital provides hard money loans for real estate investors and builders in the Southeast. Their loans can close as quickly as 24 hours, ensuring funds are ready at closing and draw payments are made on time to keep projects on track. Loan products include fix-and-flip/bridge loans, new construction loans, and rental loans. To date, they have closed over 500 real estate deals, representing over $245 million in loans.
Lending clientele: Residential real estate investors and developers
Loan criteria: Private hard money loans from $50,000 to $1.5 million
Loan Mountain Capital has earned a 5-star rating on Google based on more than 20 reviews. Customers commend their speed, customer service, and professionalism. “Their responsiveness and efficiency were unparalleled, ensuring that the entire process was seamless and stress-free,” wrote one reviewer. “Richard’s extensive industry knowledge was invaluable in guiding me through the loan and rehab process.”
704-315-5084
Carolina Capital Management
Based in the Charlotte metropolitan area, Carolina Capital Management serves real estate investors and small builders in North Carolina, South Carolina, Georgia, Virginia, Tennessee, Florida, and Texas. They provide hard money rehab loans, ground-up construction loans, and long-term financing for residential and commercial properties. Carolina Capital Management also offers consulting services, helping investors network and structure transactions. Once approved, loans can close in as little as 10 days.
Lending clientele: Residential and commercial real estate investors and developers
Loan criteria: Up to 70% ARV (fix-and-flip), up to 70% ARV (commercial), up to 85% LTC (new construction), up to 75% LTV (long-term)
Carolina Capital Management has a 5-star Google rating based on a limited number of reviews and is accredited by the Better Business Bureau (BBB) with an A+ rating. Customers praise their customer service, quick responses, and easy and efficient lending process. “Carolina Hard Money value lending locally,” reads a recent review. “Their team understands the needs of investors, takes you out of the ‘box,’ and makes no-nonsense lending decisions. We’ve worked with them on numerous transactions, and they continue to deliver.”
803-831-2262
Straightline Funding
Headquartered in Matthews, Straightline Funding provides lending solutions to real estate investors in 47 states, including North Carolina. The company was founded in 2006 and has funded millions of dollars in loans since then. They offer a variety of loan programs for real estate investors, including rehab loans, transactional funding, bridge loans, new construction loans, and DSCR rental loans. Known for their simple application process, Straightline Funding doesn’t require tax returns or income verification.
Lending clientele: Residential real estate investors
Loan criteria: Up to 75% ARV (fix-and-flip), up to 75% as-is value (bridge), up to 70% after construction value (new construction), up to 80% LTV (DSCR rental)
Straightline Funding has a 4.6-star Google rating based on a limited number of reviews. The company is not BBB-accredited, however, they maintain an A+ rating. Reviews highlight their professionalism, communication, and expertise. “Best experience, hands down!” shared a client. “David helped every step of the way with our last deal that was extremely troublesome. He was informative, patient, and saw the deal through to the end.”
888-309-1972
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 NC?
Determining whether a hard money loan is right for you in North Carolina depends on your specific needs and investment goals. These loans are best suited for real estate investors needing funding for quick-turnaround projects or those unable to secure traditional financing. If you’re prepared to take on higher costs and shorter repayment periods in exchange for the speed and flexibility of funding, consider a hard money lender in NC for your next project.
For North Carolinians wanting to leverage their home’s equity, HomeLight’s Buy Before You Sell program could be a better choice. This program offers a more competitive solution with a small flat fee instead of high interest rates, simplifying your move.
Evaluate your long-term strategy and consult a financial advisor to make sure a hard money loan fits with your investment goals. If you’re looking for investor-friendly real estate agents in North Carolina who have connections with trusted hard money lenders, HomeLight can help you find the right professionals. Learn more about HomeLight here.
Header Image Sources: (Gene Gallin / Unsplash)
- "What is ARV and how is it calculated?," Rehab Financial Group (June 2023)
- "What Is Loan-to-Value and Why Does it Matter?," U.S. News, Ben Luthi & Rebecca Safier (March 2024)
- "Why Do Hard Money Lenders Require A Down Payment?," RCN Capital (April 2024)
- "A Comprehensive Guide to Common Terms Used in Hard Money Lending," LinkedIn, Joseph Walker (September 2023)
- "What Are The Costs Involved In A Hard Money Loan?," NorthWest Private Lending (March 2024)
- "What are Points on a Hard Money Loan?," LinkedIn, Blaise Brewer (December 2021)
At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.
