As a San Francisco-based real estate investor that is interested in rehabbing homes or commercial properties, you will want to know the lending guidelines commonly applied by the San Francisco CA hard money lenders. These terms are generally applied by any reasonable hard money lender in the area, so you can be sure that you will run into some similar ones in your own search.
Common Terms Implemented By Local Lenders
As you probably already know, hard money lenders can make your investment in a residential or commercial property a success by offering a quick influx of capital when your initial funding runs out. This is incredibly useful when left without funding in the middle of an expensive rehab project.
In general, you can expect the following terms to be part of your hard money loan agreement:
• Loan Amounts: It is possible to borrow amounts as low as $100,000 and as high as $20 million. This depends almost entirely on the value of the property itself, but individual lenders will have their own guidelines on the matter.
• Loan To Value: It is of up to 70% in the San Francisco area. San Francisco CA hard money lenders are prohibited from offering more than 70% loan to value on their loans.
• Interest Rates: The lowest that you can expect to find would be 6.5%, but that is only in exceptional circumstances. A rate of 12% is much more common, but not more than that.
• Loan Term: You can expect repayment periods of up to one year. It is highly unlikely to obtain a longer repayment term, but, on construction loans, this is possible, provided that the value of the property raises enough as to justify the longer term investment.
Working With San Francisco CA Hard Money Lenders
As you can see, compared to the nationwide rates and terms, San Francisco is a quite competitive market. This is in no small part due to its active and highly liquid real estate market that is largely served by a moneyed tech sector. San Francisco CA hard money lenders are used to seeing business work this way.