A hard money loan is one option for funding your Seattle real estate investment. If you're unfamiliar with hard money loans or you're looking for reputable lenders in Seattle, this information is for you. We'll discuss what they are, their pros and cons, and five of the best lenders in the city.
Real estate investing is a popular activity for many. Whether you're looking to try your hand at house flipping or you're a seasoned investor, financing your investment poses many options and decisions that have to be made.
While home equity lines of credit (HELOCs) and home equity loans (HELs) are common options, some investors prefer to obtain hard money loans.
These loans aren't assessed based on your credit history, like a traditional loan, or the equity in your current home, like an HEL or HELOC. Instead, hard money lenders use the after repair value (ARV) of the property you're investing in as a basis for the loan.
Where traditional loans are funded by banks or credit unions, hard money loans are funded by private investors.
Utilizing hard money lenders has many benefits, but there are also some drawbacks. One challenge you'll have to overcome is how to find a reputable, trustworthy lender. Fortunately, if you're looking to fund a real estate investment in Seattle, you have several options.
Here are five of the best hard money lenders in Seattle.
Work with a Clever Partner Agent and find the right hard money lender.
Gelt Financial
While they're based in Florida, Gelt Financial works in many cities and states nationwide. They've been in business for over 30 years, and while they're not officially registered with the Better Business Bureau (BBB), they have an A+ rating there.
They offer several forms of hard money loans, such as commercial hard money loans and bridge loans, and a variety of other financial services.
Gelt is routinely reviewed positively both by those who use their services and by those who work for the company. Their Glassdoor rating is 4.3, their Yelp rating is 5 stars, and multiple other sources of reviews return five stars or close to five stars based on customer feedback.
They fund hard money loans ranging from $100,000 to over $10M in value, and their rates can be as low as 8%. You can use a loan from Gelt for several investment purposes, and they have both short-term and long-term loans to suit your needs.
Overall, Gelt Financial is a reputable hard money lender in Seattle with a reputation for quality and over thirty years of experience in the industry.
Intrust Funding
Intrust Funding is based in Bellevue, Washington, which gives Seattle investors the added benefit of their headquarters being close to the city. Like Gelt, they are highly rated across the board, routinely earning five- and four-star reviews from customers across the country.
They're a newer player, having only been in business for nine years, but that hasn't stopped them from earning a great reputation. Intrust isn't BBB accredited yet, but they have an A+ rating and, as of this writing, they have no complaints registered with the Bureau.
They offer a wide range of investment and hard money loans, and you have a good deal of flexibility for how you want to utilize your funds — so long as they go toward the investment.
Their rates are a little higher than Gelt, though, starting at 12%. However, they cover a wide range of properties that some hard money lenders shy away from, such as industrial and mixed use warehouse properties.
Overall, Intrust Funding has a solid reputation, has quickly become a worthy player in the hard money lending market, and is a solid choice for Seattle investors.
Global Capital Partners
Global Capital Partners, based in New York, has some of the most positive reviews in the industry. It's hard to find a review that's less than five stars anywhere on the internet. Customers routinely praise them for being fast, easy to work with, knowledgeable, and providing customized service.
Another common review of Global Capital Partners is their ability to listen to their customers and come up with a solution that meets their needs. Many reviews are from repeat customers, a good majority of whom claim to rely only on this company for their investment funding.
The Better Business Bureau rates them as a B+, but the only stated reason for their grade is the time the business has been in operation. Global Capital Partners has only been in business for several years, but in that amount of time they've managed to create a stellar reputation and a host of happy customers who keep coming back.
The one downside is that rates and loan types are more difficult to track down on their website than it is for other companies. However, if you contact them, you can ask questions and easily obtain the information and guidance you need.
CMN Funding
Another new lending company with a solid reputation is CMN Funding. They're based out of New York, but they work in multiple states, including Washington. Like Global Capital Partners, they have multiple five-star reviews touting their service quality, attention to detail, flexibility, and efficiency, among other things.
They will fund loans of $2M and up, so they're mostly utilized by commercial investors. However, if you're in that target market, they offer some of the best service around. Acquiring property to start a business and other commercial investment needs are a perfect fit for CMN Funding.
While there's not as much in-depth information regarding their loan types and terms like there is with other companies, they're often reported as having excellent customer service, so you'll be able to get any of your questions answered in a simple phone call.
Conventus Lending
Conventus Lending, more often referred to as Conventus or CV Lending, funds hard money loans ranging from $150,000 to $4M, and their rates range from 7.75% to 12.99%. They have loan terms ranging from six months to five years, and they work with condos, single-family homes, and multi-family homes.
If you're looking for a residential hard money lender, Conventus could be a great option for you. They have many of the benefits of other loan companies on this list, but they have more of a specialization to what they fund. For residential investors looking for moderate loans between the dollar amounts mentioned above, Conventus has many options available.
The only drawback is their site doesn't have a lot of information pertaining to hard money loans, so you must inquire what their hard money lending process is like. However, they're highly rated across the board for all of their services, so they're still a solid option.
Pros and Cons of a Hard Money Loan
Like any financing option, there are pros and cons to utilizing hard money loans. The benefits of a hard money loan include the ability to obtain funding fast, the lack of a FICO requirement, since you're not using your credit history to qualify for the loan, the flexibility that often comes with them, and their high approval rating.
There are a few drawbacks to using hard money loans, but most involve trying to find a lender who offers hard money loans and is reliable. The list above should help make that less of a challenge, though.
What is still a drawback is the high costs associated with hard money loans. Because you're not using collateral, like your personal home equity (with HELs and HELOCs), and you're not proving your creditworthiness, lenders are presumed to have more risk in the game.
Because of that, the rates and points associated with hard money loans are typically much higher than they would be for a traditional loan or an HEL or HELOC option.
Next Steps
The best option is to discuss your financial situation and funding needs with your Seattle real estate agent. A local, experienced agent will have plenty of knowledge regarding the funding options available to you and can help you determine if a hard money loan is best for you and, if it is, which lenders might be the best fit for you.
They can help you find great investment opportunities, evaluate different financing options, uncover additional cost savings opportunities, and otherwise make a more beneficial choice than you might make if left to your own devices.
Clever Partner Agents are top performers in their local markets, have expertise related to investing and lending options, and work for a flat fee so when it comes time to buy or sell you'll have an expert helping you make the best choices and get the best results.
Contact Clever today and we'll put you in touch with a Seattle Partner Agent for a no-obligation consultation.