Hard Money Lenders Ohio: Fast Real Estate Financing
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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.
Are you seeking funding for your next real estate investment project in Ohio? You might want to consider a hard money loan. Whether you’re looking to flip a fixer-upper in Cincinnati’s Over-the-Rhine or invest in a rental property in the heart of Cleveland, hard money lenders in Ohio offer the speed and flexibility that traditional loans might not provide. Hard money loans serve as an alternative financing option and are particularly valuable for those with tight project timelines, limited initial capital, or credit challenges.
If you’re not an investor but need to bridge the gap between buying and selling your home, we’ll explore some viable alternatives to help you leverage your home’s equity. This guide will walk you through the essentials of hard money lending in Ohio, helping you determine if this financial tool fits your real estate investment or home-buying needs.
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 provides short-term loans secured by real estate. Unlike traditional lenders, who focus heavily on the borrower’s creditworthiness, hard money lenders emphasize the value of the property used as collateral. They often work with real estate investors, including house flippers and those purchasing rental properties, who need quick access to funds and flexible terms.
Hard money lenders use after-repair value (ARV) — the estimated value of a property after renovations — to determine the loan amount. Typically, they lend a percentage of the ARV to ensure the investment’s security and profitability.
Interest rates on hard money loans are higher, often ranging from 8% to 15%, with additional costs like origination fees and points. If a borrower fails to repay, the lender can seize the property to recover their investment.
How does a hard money loan work?
If you’re a real estate investor in Ohio searching for a flexible financing option, connecting with hard money lenders could be a smart move. Here’s a brief overview of how hard money loans work:
- Short-term loan: These loans typically have a repayment period of 6 to 24 months, unlike the 15- or 30-year terms of conventional mortgages.
- Faster funding option: Hard money loans can be approved within days, compared to the 30 to 50 days typical for a mortgage loan.
- Less focus on creditworthiness: Approval is less dependent on your credit score and income history and more on the property’s value.
- More focus on property value: These loans are secured by collateral and are based on the loan-to-value ratio of the property.
- Not traditional lenders: Hard money loans are typically offered by individual investors or private lending companies rather than traditional banks.
- Loan denial option: These loans can be an option for those with poor credit who have been denied a mortgage but have significant home equity.
- Higher interest rates: Due to the higher risk, hard money loans come with higher interest rates compared to traditional mortgages.
- Might require larger down payments: Borrowers may need to come up with a larger down payment, sometimes up to 20%–30% of the property’s value.
- More flexibility: With fewer regulations, hard money lenders can offer flexible terms, helping borrowers avoid foreclosure and meet various criteria.
- Potential for interest-only payments: Unlike traditional mortgages, hard money loans may allow for interest-only or deferred payments initially.
What are hard money loans used for?
Hard money loans cater to specific financing needs in Ohio’s real estate market. They are often sought by investors needing quick funding or those unable to qualify for traditional bank loans. Here’s a closer look at common uses for hard money loans:
Flipping a house: For Ohio investors focused on flipping homes, hard money loans provide fast access to cash for purchasing and renovating properties. These loans allow flippers to buy properties quickly, complete necessary renovations, and sell them for profit in a short amount of time.
Buying an investment rental property: Investors seeking rental properties can use hard money loans to acquire properties quickly, especially those needing immediate repairs. Compared to traditional bank loans, hard money loans allow landlords to renovate properties and start generating rental income as soon as possible.
Purchasing commercial real estate: Hard money loans are a popular choice for buying commercial properties because of their flexibility and fast approval process. When time is of the essence, these loans help investors quickly secure valuable real estate opportunities.
Borrowers who can’t qualify for traditional loans: Individuals with substantial home equity but poor credit or other disqualifying factors may turn to hard money lenders for financing. These loans are approved based on the property’s value rather than the borrower’s credit score, making them more accessible.
Homeowners facing foreclosure: Homeowners nearing foreclosure might use hard money loans to refinance their debts or buy time to sell their property. This option can help them avoid losing their homes or having a foreclosure mark on their credit reports.
How much do hard money loans cost?
Hard money loans typically come with higher costs due to the added risk and convenience they offer. Here are some common expenses:
- 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.
- 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.
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 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 loans: 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, resulting in lower closing costs and less stringent eligibility requirements.
How to buy before you sell
Sometimes, your dream home hits the market when you least expect it. Maybe it’s a historical property in Columbus’ German Village or a charming colonial with acreage in Toledo. For Ohio homeowners wanting to buy a new home before selling their current one, HomeLight provides a seamless solution.
The Buy Before You Sell (BBYS) program lets you tap into your home’s equity to make a strong, non-contingent offer on a new property. With quick approval in 24 hours or less and no initial cost or obligation, you can secure your new home first. This means you can move in without the stress of double moves and then sell your old house vacant.
Here’s how HomeLight Buy Before You Sell works:
The program has a flat fee of 2.4% of your current home’s sold price, but the potential savings in other areas can be significant. You might save on moving costs, temporary housing, and even negotiate a better price on your new home. Plus, HomeLight’s BBYS fees are generally much lower than the interest rates on bridge loans, which range from 9.5% to 12%.
3 top hard money lenders in Ohio
Traditional lenders aren’t always the best fit for every real estate investment. If you need to act fast and seize an opportunity, consider working with one of these top-rated hard money lenders in Ohio.
Dayton Capital Partners
Dayton Capital Partners was founded by longtime real estate investors and offers hard money rehab loans and transactional funding. They focus on single-family homes and 1- to 4-unit apartments, but they’ve also funded loans for condos, townhouses, industrial buildings, and more. For properties in the Dayton, Cincinnati, or Columbus regions, there is no loan minimum; for anything outside those areas, there is a $75,000 loan minimum. Dayton Capital Partners charges minimal fees and touts 12-month loan terms with the option to extend for good borrowers.
Lending clientele: Residential and commercial real estate investors
Loan criteria: The typical down payment is 25% of the purchase price, with a minimum requirement of $15,000. Dayton Capital Partners typically finances 100% of the rehab costs, with an interest rate of around 12%.
Dayton Capital Partners boasts a 4-star Google rating from over 20 reviews. Clients commend their willingness to answer questions, streamlined lending process, and quick closings. “Being a self-employed business owner and investor, it’s hard to find traditional lending options that work,” one client shared. “The process with Dayton Capital Partners was smooth from start to finish, and closing was painless.”
937-240-1805
Tidal Loans
Texas-based Tidal Loans services 45 states, including Ohio. Established in 2016, the private direct lender has more than 50 years of combined experience in real estate investing. They offer a variety of residential hard money loan options, including fix-and-flip, new construction, rental property, multi-family, commercial, and vacation rental. The company loans on single-family and multi-family residential properties that are used for investment purposes. Once the necessary documentation has been provided, Tidal Loans can typically close a loan the next business day.
Lending clientele: Residential and commercial real estate investors
Loan criteria: Up to 70% of the ARV
Tidal Loans holds a 4.9-star Google rating with over 70 reviews. Clients praise the staff’s professionalism, dedication, and responsiveness. “Getting a loan from Tidal Loans was quick and simple,” reads a recent review. “The staff were fantastic to work with. The loan application and funding process deserve 5 stars.”
832-757-1262
Easy Street Capital
Easy Street Capital is a private real estate lender based in Texas. The company lends in 47 states, including Ohio. They offer three different hard money loan programs: EasyFix for flippers, EasyRent for landlords, and EasyBuild for builders. The company caters to real estate investors of all experience levels and specialties, and loans can close in less than 48 hours.
Lending clientele: Residential real estate investors
Loan criteria: Depends on the in-house valuation of the property; in most cases, the max LTV is 70% for EasyFix loans
Easy Street Capital holds a 4.7-star Google rating based on nearly 200 reviews. Clients appreciate the team’s willingness to go above and beyond, quick turnaround times, and competitive terms. “Used Easy Street to fund one of my fix-and-flip projects, and it was a pretty seamless process,” wrote one client. “I typically reach out to Amanda, and she is always responsive and helpful even after hours, which is much appreciated.”
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 Ohio?
The decision to work with a hard money lender in Ohio should ultimately depend on your specific needs and real estate goals. Hard money loans can be a great option for real estate investors who need quick cash and can handle higher costs and shorter repayment terms. If you need fast, flexible financing that traditional loans can’t provide, a hard money lender in Ohio might be the right fit.
For homeowners looking to use their home equity without incurring high interest rates, HomeLight’s Buy Before You Sell program is a viable option. This program allows you to make a strong, non-contingent offer on a new home, resulting in a smoother, less stressful moving process.
When it comes to major financial decisions, it’s important to consider your long-term strategy and consult a financial advisor. If you’re ready to explore hard money lending or want to learn more about leveraging your home’s equity, HomeLight can connect you with top professionals in Ohio who understand your unique needs and investment criteria.
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