Constitution Lending is proud to provide our world class direct lending products to our many Florida-based investor clients. Real estate markets are on fire nationally, and nowhere is this more true than the Sunshine state.
As prices climb and bidding wars breakout, you need to stick to your guns and your underwriting process, but still have to convince sellers to select your bid over the competition. It's environments like these where our products truly shine. At 23 calendar days, our average time to close is comparable to a cash closing and because our underwriters emphasize transparency, we don't hit you with a surprise rejection the day before closing.
What is hard money lending?
A hard money loan is loan against real estate that typically closes faster and less painfully than a standard bank loan. Often times, these loans include funds for renovating the property before an investor flips it or leases and refinances the property. Today, many hard money lenders also offer more conventional loan products including term loans.
What do I need to get a hard money loan?
While a bank will require 3 years of tax returns and a seemingly endless underwriting process, most hard money lenders focus on two aspects: credit score and experience. You will of course need the usual supporting documentation for the property, including insurance, appraisal, and title insurance, but the two biggest things you will need are a solid credit score and documentation of your experience.
Credit Score
Minimums for credit scores vary by lender and over time, but broadly the very minimum for most lenders is a 640 FICO and usually they look at the middle score out of your 3 scores from the bureaus: Equifax, TransUnion, and Experian. Some loan programs will accept scores below 640, but often at very high rates. If you don't have a 640 FICO, you should see if you have a partner or family member who would cosign your loan to bolster the strength of your application and increase your chances of getting a good rate.
Real Estate Experience
You don't need to have experience for a hard money loan, but it will help you get the best price. It makes it easy for you and your lender if you keep information about your experience in a Schedule of Real Estate Owned, this way anyone underwriting your loan can quickly verify how many properties you have flipped or invested in within the last 24-36 months. Keeping this up to date and organized will help your loan close on time.
Why do I need a hard money lender?
Real estate is hot across the country and in Florida especially. In this climate, you need a hard money lender to show sellers that you're serious and will close quickly. 9 times out of 10, bidding with a preapproval from a bank will get your bid thrown out instantly. Submitting a bid with a preapproval from a reputable lender like Constitution will help you compete and win more properties.
What are the types of hard money loans?
Bridge
A bridge loan is a short term loan, usually interest only, of 24 months or less. This loan is a great option for an investor who is in the process of selling a property and needs to take some cash out to do more deals. Often times, these loans can be used to "bridge" a construction loan to more permanent financing such as a rental loan or term loan.
Fix and Flip
Fix and flip loans are also called construction loans. This product can be used to acquire real estate and will also lend you funds to make improvements to it. Since most investors are looking to add value to their investments by renovating them, this is a fantastic option for many of our clients. After the renovations, our clients either sell the property and use the proceeds for their next deal or it up and refinance with our rental loan program.
Rental
Many hard money lenders now offer longer term financing at rates that rival local banks, but with much more flexibility. This product is perfect for investors who are looking to buy real estate with tenants in-place or have renovated and leased a property and are now looking to cash-out to do more deals. Constitution offers industry leading rates in this category with streamlined underwriting.
Where does Constitution lend?
Constitution is a national direct lender. We lend across the state of Florida with most of our lending concentrated in the below cities:
1.) Miami
2.) Tampa
3.) Orlando
4.) Panama City
5.) Biscayne
6.) Palm Beach
7.) Fort Myers
8.) Jacksonville
9.) Sarasota
10.) Bradenton
11.) Cape Coral