The great thing about real estate investing is that you don’t need to be a trust fund kid or win the lottery to get into the investment game. With hard money loans, you can get started within a few weeks or even within a day.
When you work with hard money lenders, you skip the red tape of banks or other major financial institutions as hard money lenders are private lenders with the ability to offer more flexible terms and eligibility requirements.
Find out more about hard money loans and the best lenders.
What Is a Hard Money Loan?
Put simply, a hard money loan is a short-term loan, typically 12 months or less, where the loan amount is based on the value of the property and the property being used as collateral. Hard money lenders are less concerned with the borrower’s credit or any past foreclosures or short sales.
As long as the property deal and value looks good, hard money lenders will put up the funds. However, because of the higher risk, hard money lenders traditionally charge higher interest rates, fees, and points. And your rates will especially be higher if your lender offers no money down loans.
No money down lenders are few and far between as the risk for these lenders increases exponentially — they’re putting up 100% of the funds for your property. With no money down loans, expect even higher interest rates and a bit more thorough search into your income and credit history.
So how do you find the elusive no money down hard money lender? Well, it’s not always easy, but to help you get started here are five of the best no money down hard money lenders.
1. Ideal Capital Solutions
Ideal Capital Solutions works with both large-scale and small-scale investors who are looking for transactional funding, fix and flip loans, refinancing options, or construction loans. While funding for projects is based on a case by case basis catering to each individual’s situation, Ideal Capital Solutions does offer 100% financing if you meet the right requirements.
For one- to four-family, non-owner occupied properties, they will loan you 100% financing of the purchase price including the cost of improvements and soft costs, as long as all costs fall under 70% of the completed value of the project.
Though depending on your location, you may have to keep costs under 65% of the after repair value (ARV). Loan terms are from 6 to 12 months with rates and cross-collateralization is allowed to leverage your property.
2. Money Source of America
Money Source of America offers several different loan options that require no down payment including their popular 100% Fix and Flip Program that funds 100% of the property purchase and covers 100% of rehab costs up to 65% of ARV. Rates start at 11.99% with a 12-month term where you pay interest only.
The 100% Fix and Flip Program is only offered in certain locations and you must meet the eligibility requirements including a credit score of 620 or better, liquid assets in the bank, great mortgage history, no bankruptcy in the last three years, documented income, be a legal U.S. resident, and your primary residence must be within 60 miles of the investment property.
Money Source of America also provides bridge, rehab, and construction loans that offer no down payment options or 100% coverage of purchase and rehab costs with no minimum credit score and low interest rates starting at 6%.
3. Freeland Lending
If you’re looking to fix and flip only, Freeland Lending is a great pick, especially if flipping houses is old hat for you. Available in 40 states, they offer a 6 to 12 month fix and flip loan, funding 100% of the property purchase and 100% of the rehab.
There’s no down payment, no minimum credit score, and interest-only payments with loan amounts ranging from $50,000 to $350,00. Before you’re approved, the property will need to be appraised and they’ll have a look at your income and assets.
4. ARCH Bridge Loans
Boasting over $3 billion in commercial and residential loans, ARCH Bridge Loans offers investors quick capital for one- to four-unit properties, condos, and commercial options up to $2.5 million.
While they only operate in Arizona, California, Colorado, Nevada, Washington, Oregon, and Utah, if you live in one of these states you’ll be able to take advantage of their High Leverage Option where ARCH Bridge Loans will fund up to 100% of the purchase price with rates between 12% and 15% for a 6 month term.
With the 100% finance loan, you will see a few upfront fees including an $850 processing fee and a $450 first trust deed servicing.
5. Do Hard Money
One of the more popular no money down hard money lenders, Do Hard Money is great for both newbies to the real estate game or seasoned investors. They offer a variety of loans with 100% financing on fix and flip loans, bad credit hard money loans, and refinance loans.
Depending on your project, Do Hard Money will provide funds to cover the purchase price, rehab, points, interest, and closing costs even if you have less-than-stellar credit and zero real estate investment experience.
If all your costs fall under 70% of the ARV you’ll be able to skip the down payment plus you won’t have monthly payments throughout the duration of your five-month term loan. You’ll also be provided with an experienced construction project manager and a support team of fix and flip specialists to help you with your project.
Partner with an Experienced Real Estate Agent
Whether your fixing and flipping your first property or you’re making your hundredth multi-million dollar real estate investment, you’ll want to work with an experienced real estate agent who can help guide you through the entire process from finding the right property to securing the right funding.
And when you partner with Clever, you’ll be connected with a local, top-rated Partner Agent who can find you a great property in a desirable location that ticks all the boxes so you can qualify for the best rates and funding with your hard money lender.
Get in touch with Clever to work with an experienced Partner Agent in your area and start growing your real estate investments.