They say that all real estate is local, and that is certainly true for California hard money loans. The state’s real estate market is very liquid. This means that there is a lot of money looking for an investment. Even though hard money loans typically have higher interest rates and more points than a conventional loan, the market is looser in California. At LendingXpress, the interest rate starts at 7.99%. It can go up from there, but usually not more than 11%. The interest rate depends on your experience as an investor, creditworthiness, and the potential value of the property. In addition to the interest on the loan, expect to pay another 1 to 2%, called points, to the lender. In the rest of the country, points can cost between 2 and 5%. So you really do have some advantages as a borrower here!
Learn about How Hard Money Loans Work in California
One factor in California hard money loans is the strict laws protecting tenants. Legislators wrote these to protect tenants from unscrupulous developers, landlords, and flippers. Ideally, you purchase property that does not have any tenants. At LendingXpress, we have a strict policy that forbids properties from being occupied while they are rehabbed. Before you seal the deal on any potential property, be sure it’s unoccupied.
If you have questions about how a hard money loan will work, give us a call! We’re happy to talk you through the whole process.