Hard Money Lenders Portland: Short-Term Loans for Real Estate

What are hard money loans used for?

Hard money loans are versatile financial tools that can serve many different real estate investment purposes. Below are some common scenarios where these loans come into play:

• Flipping a house: Investors often use hard money loans to fund flipping homes, where quick financing is needed to purchase and renovate properties for a fast sale.
• Buying an investment rental property: For those purchasing rental properties, hard money loans can provide the capital needed to secure and rehab units, getting them rent-ready.
• Purchasing commercial real estate: Investors in commercial real estate can leverage hard money loans to close deals quickly, which is often crucial in competitive markets.
• Borrowers who can’t qualify for traditional loans: Hard money loans can be a lifeline for borrowers who don’t meet the stringent requirements of traditional lenders, providing access to funds when other options aren’t available.
• Homeowners facing foreclosure: These loans can be used to prevent a foreclosure, allowing homeowners to refinance their home quickly and avoid losing their property.

How much do hard money loans cost?

Hard money loans generally come with higher costs due to the increased risk and speed of funding. Here’s a breakdown of the typical costs:

• Interest rates: These typically range from 8% to 15% or more, depending on the lender’s risk assessment and the specifics of the project.
• Origination fees: Lenders often charge 1% to 5% of the loan amount upfront as a fee for processing and approving the loan.
• Closing costs: These fees, which may include legal, appraisal, and administrative costs, are often higher than traditional loans and vary by lender and property type.
• Points: Lenders might charge points, which is a percentage of the loan amount, as part of the cost. Points typically range from 2% to 5%.

Online calculators can help estimate these costs.

Alternatives to working with hard money lenders

If a hard money loan doesn’t seem like the right fit for your situation, here are some alternative financing options:

• Take out a second mortgage: With substantial equity in your home, a home equity loan or HELOC could offer lower interest rates than hard money loans.
• Cash-out refinance: This option lets you refinance your existing property, pulling out cash to finance your next investment, often at a lower interest rate.
• Borrow from family or friends: This can provide more flexible repayment terms, and may involve little or no interest, making it a more affordable option than hard money loans.
• Use a government-backed loan program: Programs like the FHA, VA, or USDA loans may provide lower down payments and reduced interest rates.
• Peer-to-peer loan: These loans are issued by individual investors via lending platforms. They offer terms similar to hard money loans, but sometimes with more favorable rates.
• Specialized loan programs: Consider loans tailored for fixer-uppers or investment properties. These can replace a hard money loan if you already have one or need to refinance.
• Request a seller financing option: In some cases, sellers may offer to finance the purchase themselves, resulting in lower closing costs and more flexible terms.

How to buy before you sell

HomeLight’s Buy Before You Sell program is a game-changer for homeowners in Portland looking to buy a new home before selling their current one. This program allows you to make a strong offer on your next property without waiting for your current home to sell. With HomeLight’s program, you’ll avoid the stress of juggling two mortgages or rushing the sale of your current home.

If your home qualifies, you can get your equity unlock amount approved in 24 hours or less, with no cost or commitment required. Once approved, you can confidently purchase your next home and then sell your current one vacant, avoiding the hassle of moving twice.

Here’s how HomeLight Buy Before You Sell works:

Once your new home is secured, HomeLight works with you to prep and sell your old property at its best price, all while covering costs upfront. The program’s benefits include buying a new home before selling your current one, securing a great price for your existing home, and avoiding the 9.5% to 12% bridge loan rates typically associated with similar programs.

3 top hard money lenders in Portland

Traditional lenders might not be the solution for every real estate investment. If you want to move quickly and capitalize on an opportunity, explore the hard money lending options in Portland.

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.

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Should I partner with a hard money lender in Portland?

The decision to use a hard money lender in Portland should be based on your individual situation and real estate investment goals.

However, for homeowners looking to leverage their equity, consider HomeLight’s Buy Before You Sell program instead. It offers a more manageable solution without the high interest rates and fees that typically come with hard money loans. For more guidance on real estate investments in Portland, HomeLight is here to help you make informed decisions tailored to your needs.

As with any major financial decision, consider your long-term strategy and consult with a financial advisor to make sure it aligns with your overall investment goals. If you’re looking to connect with investor-friendly real estate agents in Portland who have access to trusted hard money lenders, let HomeLight introduce you to top professionals in your area who fit that criteria.

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