Hard Money Lenders Rhode Island: Flexible Real Estate Loans

What are hard money loans used for?

Hard money loans in Rhode Island are primarily used for short-term real estate investments where timing and flexibility are major factors. Below are the most common situations in which a hard money loan can be beneficial:

• Flipping a house: If you’re flipping homes, hard money loans offer quick access to cash for purchasing and renovating a property. Since the loan is based on the after-repair value, it’s ideal for short-term projects where you expect to sell quickly.
• Buying an investment rental property: For those purchasing rental properties, hard money loans can be a useful tool to quickly acquire a property that might not qualify for traditional financing. Once renovations are complete, you can refinance with a long-term loan.
• Purchasing commercial real estate: Hard money loans can help you act fast on a commercial property opportunity, giving you the cash you need to close the deal before conventional lenders can approve your loan.
• Borrowers who can’t qualify for traditional loans: If you’re unable to get a traditional loan due to credit or income restrictions, a hard money loan could bridge the gap by relying on the value of the property itself rather than your financial history.
• Homeowners facing foreclosure: If you’re at risk of losing your home, hard money loans might offer a short-term solution to prevent foreclosure while you stabilize your finances or sell the property.

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:

Online calculators can help estimate these costs.

Alternatives to working with hard money lenders

If you’re a homeowner in Rhode Island looking to leverage your current home’s equity, there are several alternatives to hard money loans:

• Take out a second mortgage: A home equity loan or home equity line of credit (HELOC) can provide lower interest funding than a hard money loan.
• Cash-out refinance: Refinancing your home allows you to pull out cash to finance new investments, often at lower interest rates than hard money loans (refinance).
• Borrow from family or friends: This option can offer more flexible repayment terms and lower or no interest, depending on your agreement.
• Use a government-backed loan program: Programs like FHA, VA, or USDA loans can help you purchase a property with lower down payments and lower interest rates.
• Peer-to-peer loan: Online platforms like Funding Circle provide loans similar to hard money but with different terms and potentially lower costs.
• Specialized loan programs: Some programs are tailored to fixer-uppers or investment properties, offering better terms for renovation projects.
• Request a seller financing option: In some cases, the seller might finance the purchase, potentially lowering closing costs and loosening eligibility requirements.

How to buy before you sell

HomeLight’s Buy Before You Sell program helps homeowners in Rhode Island purchase a new home before selling their current one, removing the stress of juggling two transactions at once. The program provides the cash needed to make a strong offer on your next property while you take the time to prepare your existing home for sale.

The biggest advantage of the program is flexibility. You can buy your new home, move in, and then focus on selling your old home without worrying about overlapping mortgages or rushed decisions. This way, you can take your time with any renovations or touch-ups needed to get the best possible price.

Here’s how HomeLight Buy Before You Sell works:

Although there’s a flat fee of 2.4% of your current home’s sold price, the potential savings you could see in other areas might outweigh the cost.

Typical rates for the program range from 9.5% to 12%, making it an affordable alternative to other options like bridge loans. HomeLight’s transparent fee structure and support throughout the process can help you buy a new home with peace of mind before selling your current one.

2 top hard money lenders in Rhode Island

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 Rhode Island.

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.

Get Started

Should I partner with a hard money lender in Rhode Island?

Hard money loans can be a great fit if you’re looking to secure quick funding for projects like flipping houses or buying rental properties, especially when traditional lenders aren’t an option.

However, these loans aren’t always the best choice for everyone. Homeowners or investors with longer timelines or smaller margins might find the higher costs challenging.

That’s where HomeLight’s Buy Before You Sell program comes in as an alternative. If you’re a homeowner looking to leverage your equity without the steep fees and tight repayment schedules, this program allows you to purchase your next home while selling your current one at a pace that works for you.

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 want to connect with investor-friendly real estate agents in Rhode Island who have access to trusted hard money lenders, let HomeLight introduce you to top professionals in your area who fit that criteria.

Header Image Source: (sgoodwin4813 / Depositphotos)