Hard Money Lenders South Carolina: Fast Funding Solutions
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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 fund your next real estate investment in South Carolina with a hard money loan? Whether you’re eyeing a property flip in Greenville or purchasing a rental unit in Columbia, hard money loans offer a fast, flexible financing solution. Hard money lenders in South Carolina work with investors and homeowners who need quick funding, placing less emphasis on credit scores and income histories.
This guide will walk you through the basics of hard money lending in South Carolina, from understanding what these loans are to exploring their common uses and associated costs. We’ll also share alternatives to hard money loans and explain how HomeLight’s Buy Before You Sell program can help you leverage your home equity effectively.
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?
Hard money lenders are private individuals or companies that provide short-term loans secured by real estate. Unlike traditional banks, hard money lenders focus on the property’s value rather than the borrower’s credit score. These lenders often work with house flippers and real estate investors purchasing rental properties, offering quick and flexible financing options.
To determine loan amounts, hard money lenders use after-repair value (ARV) — the estimated value of a property after it has been repaired or renovated. They typically lend a percentage of the ARV, ensuring the investment is secure and potentially profitable.
Interest rates for hard money loans are higher, ranging from 8% to 15%, with repayment terms between 6 to 24 months. Additional costs may include origination fees, closing costs, and points. Failure to repay the loan can result in the lender taking possession of the collateral property.
How does a hard money loan work?
If you’re a real estate investor looking for quick and flexible financing, working with hard money lenders in South Carolina could be a great option. Here’s a quick breakdown of how hard money loans work:
- Short-term loan: These loans typically range from 6 to 24 months, much shorter than the 15- or 30-year terms of traditional mortgages.
- Faster funding option: Hard money loans are processed quickly, often within days, unlike the 30 to 50 days needed for conventional mortgage approvals.
- Less focus on creditworthiness: Approval is based more on property value rather than the borrower’s credit score.
- More focus on property value: The loan amount is determined by the loan-to-value ratio of the property used as collateral.
- Not traditional lenders: Hard money loans are provided by private individuals or companies, not traditional banks.
- Loan denial option: Suitable for borrowers with significant home equity who have been denied traditional loans.
- Higher interest rates: These loans come with higher interest rates due to the increased risk involved.
- Might require larger down payments: A down payment of 20% to 30% of the property’s value is often required.
- More flexibility: Lenders offer more flexible terms and may be more lenient with debt-to-income ratios and credit scores.
- Potential for interest-only payments: Borrowers might have the option to make interest-only payments initially, making the loan more manageable in the short term.
What are hard money loans used for?
In South Carolina, hard money loans serve specific needs in the real estate market, offering solutions where traditional financing falls short. Ahead, we’ll explore some common uses for hard money loans:
Flipping a house: Investors in South Carolina involved in flipping homes find hard money loans beneficial due to their fast access to funds. This allows for quick purchase and renovation, helping investors resell properties for a profit in a short amount of time.
Buying an investment rental property: Hard money loans help investors quickly acquire rental properties, particularly those needing immediate renovations. This speeds up the process of making the property rentable and generating income.
Purchasing commercial real estate: In commercial real estate, timing is everything. Hard money loans provide the quick funding needed to take advantage of investment opportunities without the delays of conventional loans.
Borrowers who can’t qualify for traditional loans: Hard money loans are a viable option for individuals with poor credit but substantial home equity. These loans are based on the property’s value, making them accessible to those who might otherwise be turned down.
Homeowners facing foreclosure: For homeowners at risk of foreclosure, hard money loans can offer a temporary financial solution. They can refinance debts or provide time to sell the property, potentially preventing foreclosure and its negative impact on credit.
How much do hard money loans cost?
Hard money loans come with higher costs due to the increased risk and convenience they offer. Typical costs include:
- Interest rates: These can range from 8% to 15%, based on the lender’s risk assessment.
- Origination fees: Lenders may charge 1% to 5% of the total loan amount.
- Closing costs: Additional fees can include legal, appraisal, and administrative costs.
- Points: Lenders might charge points upfront, which are a percentage of the loan amount.
You can use online calculators to get an estimate of these costs.
Alternatives to working with hard money lenders
If you’re a homeowner looking for alternatives to hard money loans, consider these options to tap into your home’s equity:
Take out a second mortgage: A home equity loan or home equity line of credit (HELOC) allows you to borrow against your home’s equity, usually at lower interest rates than hard money loans.
Cash-out refinance: This option lets you refinance your existing mortgage, drawing cash out to fund your new investment, often at more favorable rates than hard money loans.
Borrow from family or friends: Loans from family or friends can come with flexible terms and lower or no interest, making them a cost-effective alternative.
Use a government-backed loan program: Programs such as FHA, VA, or USDA loans offer lower down payments and interest rates, suitable for various home-buying needs.
Peer-to-peer loans: Through platforms like Funding Circle, you can secure loans from individual investors, often with different terms from hard money loans.
Specialized loan programs: Look into loans designed for specific purposes like fixer-uppers or refinancing investment properties to replace an existing hard money loan.
Request a seller financing option: Sellers may sometimes finance the purchase themselves, leading to lower closing costs and more flexible eligibility criteria.
How to buy before you sell
You might stumble upon your dream home when you least expect it — be it a historic Charleston estate or an oceanfront condo in Myrtle Beach. Yet, buying a new home while still owning your current one can be challenging.
HomeLight offers a seamless solution with its Buy Before You Sell (BBYS) program for homeowners in South Carolina. The BBYS program allows you to use your current home’s equity to make a strong, non-contingent offer on a new property. If your home meets the criteria, you can get your equity unlock amount approved within 24 hours, with no initial costs or commitments.
Here’s how HomeLight Buy Before You Sell works:
The BBYS program charges a flat fee of 2.4% of your current home’s sold price. However, this fee could be offset by savings on moving costs, temporary housing, and the final purchase price of your new home. Plus, HomeLight’s BBYS fees are usually lower than the interest rates on bridge loans, which currently range from 9.5% to 12%.
3 top hard money lenders in South Carolina
Traditional lenders may not be the ideal financing solution for every real estate investment. If you need to act quickly to capitalize on an opportunity, consider partnering with one of these top-rated hard money lenders in South Carolina.
Carolina Capital Management
Based in Mount Pleasant, Carolina Capital Management caters to real estate investors and small builders across South Carolina, North Carolina, Georgia, Virginia, Tennessee, Florida, and Texas. They offer hard money rehab loans, ground-up construction loans, and long-term financing for both residential and commercial properties. Additionally, Carolina Capital Management provides consulting services to help investors network and structure their transactions. Once approved, loans can be closed 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 boasts a 5-star rating on Google from a limited number of reviews and holds an A+ rating from the Better Business Bureau (BBB). Customers commend their outstanding customer service, prompt responses, and streamlined, efficient lending process. “Worked with CCM to close my first deal and the whole team is amazing!” shared a client. “Thank you also to Candace for being there every step of the way to answer questions. Can’t wait to do more deals together.”
803-831-2262
VP Capital Lending
VP Capital Lending, headquartered in Greenville, is a private lender in the bridge and rental space. Their loan programs include bridge loans (fix-and-flip and hard money), long-term rental loans (rental properties), and multifamily loans (fix-and-flip and long-term rental). They have funded over 6,400 real estate loans to date, and serve 45 states, including South Carolina. Borrowers can get approved in just 15 minutes, and closing takes two to three weeks, or less, on average.
Lending clientele: Residential real estate investors
Loan criteria: Up to 80%–90% LTV
VP Capital Lending has earned a 5-star rating on Google from over 20 reviews. Although they are not BBB-accredited, they maintain an A+ rating. Clients frequently praise VP Capital Lending for their responsiveness, efficiency, and supportive staff. “We have used VP Capital Lending for over 7 years,” reads a recent review. “Each time, we have received superior service. The loan process is quick and simple. VP Capital Lending is a 5-star company. One of the best in the industry.”
803-485-1080
Coastal Equity Group
Located in Charleston, Coastal Equity Group is a private equity fund and hard money lender founded in 2018. The company serves new and experienced real estate investors in South Carolina, North Carolina, Florida, Georgia, Tennessee, and Kentucky. Their loan programs include fix-and-flip loans, new construction loans, multi-family bridge loans, and traditional bridge loans. Hard money loan amounts range from $75,000 to $3 million. Borrowers can qualify in less than 24 hours, and the application can be easily completed online.
Lending clientele: Residential real estate investors and developers
Loan criteria: Up to 75% ARV
Coastal Equity Group boasts a 4.9-star rating on Google based on over 30 reviews. Clients consistently highlight the company’s professionalism, speed, and reliability in closing deals. “This is the second loan we have close with Coastal Equity Group,” wrote a reviewer. “We are very grateful to their entire team. Everything was quick and smooth. They are an excellent business partnership for us.”
843-638-2100
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 South Carolina?
Deciding if a hard money loan is right for you in South Carolina depends on your specific needs and investment goals. These loans are best suited for real estate investors who need quick, flexible funding for projects like house flips or rental property acquisitions. The higher interest rates and shorter repayment terms are trade-offs for the speed and flexibility hard money loans offer.
If you’re a homeowner looking to leverage your home’s equity without the high costs of a hard money loan, consider HomeLight’s Buy Before You Sell program. This program allows you to use your equity to make a competitive offer on your next home while avoiding the hassle of moving twice. HomeLight’s flat fee is typically much lower than the high interest rates of hard money loans.
As with any major financial decision, it’s important to weigh your options and consult with a financial advisor to make sure it aligns with your long-term goals. If you’re looking to connect with experienced real estate agents and trusted hard money lenders in South Carolina, HomeLight can introduce you to top professionals in your area.
Header Image Source: (sepavone / Deposit Photos)
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