Hard Money Lenders Albany: Quick Capital for Investors

Published on August 27th, 2024
11 min read

Joseph Gordon Editor
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Joseph Gordon is an Editor with HomeLight. He has several years of experience reporting on the commercial real estate and insurance industries.

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Finding the right financing in Albany’s real estate market can be tough, especially if traditional lenders aren’t feasible. A hard money loan provides an alternative solution for real estate investors, house flippers, and others needing quick access to capital. Unlike conventional mortgages, these loans offer more flexibility and faster funding, which can be particularly helpful in Albany, where timing is everything.

Understanding hard money loans is essential if you’re considering investing in property in Albany or tackling a home renovation project.

We’ll explain how these loans work, who they’re suited for, and what to expect regarding costs. Plus, we’ll explore some alternatives and introduce you to a few top-rated hard money lenders in the area to help guide your decision.

Editor’s note: This post is for educational purposes and is not intended to be construed as financial advice. HomeLight always encourages you to consult your own advisor.

What is a hard money lender?

Hard money lenders offer short-term financing solutions to clients who need quick cash, typically for real estate investments. Their clients often include house flippers and individuals investing in rental properties who need funding to complete their projects. Instead of focusing on credit scores, hard money lenders base loan amounts on the after-repair value (ARV) of the property. ARV represents the estimated value of the property after renovations are completed.

These loans come with higher interest rates and fees than traditional mortgages because they carry more risk for the lender. Borrowers can expect rates between 8% to 15%, and fees like origination fees are usually 1% to 5% of the loan amount. If a borrower fails to repay the loan, the lender can seize the property as collateral, making it essential to understand all the terms before committing.

How does a hard money loan work?

A hard money loan in Albany is a unique financing option that operates differently from traditional mortgages. Here are the key features that set it apart:

Short-term loan: These loans typically have terms ranging from 6 months to a few years, much shorter than a 30-year mortgage.
Faster funding option: Hard money loans are known for their quick approval and funding process, often closing within 30 to 50 days.
Less focus on creditworthiness: Hard money lenders are less concerned with your credit score, and more focused on the value of the property.
More focus on property value: The primary consideration for hard money lenders is the property’s loan-to-value ratio and its potential for increasing in value after renovations.
Not traditional lenders: These lenders are typically private individuals or companies, not banks or credit unions, giving them more flexibility to fund unconventional deals.
Loan denial option: If the lender feels the property won’t provide enough security, they can deny the loan, even if the borrower meets other requirements.
Higher interest rates: Hard money loans usually come with higher interest rates, often ranging between 8% to 15% or more, to compensate for the increased risk.
Might require larger down payments: These loans may require down payments of 20%–30% or more, compared to a typical mortgage down payment.
More flexibility: Hard money lenders can adjust loan terms, interest rates, and repayment schedules more easily than traditional lenders, offering greater flexibility in financing terms.
Potential for interest-only payments: Some hard money loans may allow borrowers to make interest-only payments for part or all of the loan term, with the principal due at the end.

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What are hard money loans used for?

Hard money loans address specific financing needs in the Albany real estate market. They’re often sought after by investors who require fast funding or may have difficulty qualifying for traditional bank loans. Let’s learn more about what hard money loans are typically used for:

Flipping a house: For Albany investors focused on flipping homes, hard money loans offer fast access to cash for purchasing and renovating properties. These quick-turnaround loans help flippers acquire properties in competitive markets, make necessary improvements, and resell them for profit in a short timeframe.

Buying an investment rental property: Investors seeking rental properties can use hard money loans to snap up properties fast, especially those needing immediate repairs. Compared to traditional bank loans, hard money loans allows landlords to complete renovations and start generating rental income more quickly.

Purchasing commercial real estate: Hard money loans are often used in commercial real estate transactions due to their flexibility and quick closing times. They are particularly useful in situations where timing is crucial, and a quick decision can mean the difference between securing a valuable investment or missing out altogether.

Borrowers who can’t qualify for traditional loans: Individuals with substantial home equity but poor credit or other disqualifying issues sometimes approach hard money lenders in Albany for assistance. With hard money loans, qualification is determined more by the asset’s worth than the borrower’s credit score.

Homeowners facing foreclosure: Homeowners nearing foreclosure may use hard money loans to refinance their debts or buy time to sell the property. This can provide a temporary solution to avoid losing their home or a foreclosure mark on their credit report.

How much do hard money loans cost?

Hard money loans generally cost more than traditional loans due to the higher risk for lenders and the convenience of quick, flexible funding. Typical costs include:

Interest rates: 8% to 15% or higher, based on risk assessment.
Origination fees: 1% to 5% of the loan amount.
Closing costs: Legal, appraisal, and administrative fees.
Points: A percentage of the loan amount charged upfront.

Online calculators can help estimate these costs.

Alternatives to working with hard money lenders

If a hard money loan isn’t the right fit for your financial needs, here are a few alternatives to consider:

Take out a second mortgage: By leveraging your home equity, you can take out a second mortgage or a home equity line of credit (HELOC) at a lower interest rate than a hard money loan.
Cash-out refinance: This option allows you to refinance an existing property, pulling out cash for other investments, often with more favorable terms than a hard money loan.
Borrow from family or friends: Personal loans from family or friends can come with more flexible terms and lower or no interest, providing a cost-effective option.
Use a government-backed loan program: Programs like FHA, VA, or USDA loans can help with purchasing homes or investment properties with lower down payments and interest rates.
Peer-to-peer loan: Online lending platforms connect you with individual investors who offer loans with terms similar to hard money loans but may provide different options for repayment.
Specialized loan programs: If you’re investing in a fixer-upper or specific types of property, specialized loan programs may offer more favorable terms compared to hard money loans. These programs often focus on renovation and property investment refinancing.
Request a seller financing option: In some cases, sellers may be willing to finance the sale themselves. This can lead to lower closing costs, more flexible terms, and less stringent eligibility requirements.

How to buy before you sell

HomeLight’s Buy Before You Sell program is designed to help homeowners purchase a new home before selling their current one. This program is particularly useful in markets like Albany, where timing can make or break a deal. Instead of waiting to sell your house before purchasing another, the program allows you to tap into your equity early, giving you the freedom to secure your next home while still preparing your current one for sale.

The Buy Before You Sell (BBYS) program allows you to leverage the equity in your existing home to make a stronger, non-contingent offer on a new property. If your home qualifies, you can get your equity unlock amount approved in 24 hours or less, with no cost or commitment required. Once approved, you can confidently purchase your next home and then sell your current one vacant, avoiding the hassle of moving twice.

Here’s how HomeLight Buy Before You Sell works:

Although there’s a flat fee of 2.4% of your current home’s sold price, the potential savings you could see in other areas might outweigh the cost. For example, you might save on moving expenses, temporary housing, and even the final purchase price of your new home. On top of that, HomeLight’s BBYS fees are typically much lower than the interest rates on bridge loans, which currently range from 9.5% to 12%.

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3 top hard money lenders in Albany

Traditional lenders might not be the solution for every real estate investment. If you’re looking to move quickly and capitalize on an opportunity, explore the hard money lending options available in Albany.

Albany Hard Money

Founded in 2006, Albany Hard Money is the largest private money lender in the Capital Region. Borrowers can get approved in less than 72 hours, and loan amounts range from $50,000 to $2 million, with terms spanning 12 to 24 months. The company offers three types of loans: fix-and-flip, rentals, and cash-out equity. They work exclusively with real estate investors and do not lend on primary residences.

Lending clientele: Residential and commercial real estate investors

Loan criteria: $50,000 to $2 million loan amounts

Albany Hard Money touts a 4.6-star rating on Google. Clients commend their helpful and professional service, fast turnaround times, and clear communication.

albanyhardmoney.com

518-708-8221

New Silver

New Silver funds real estate investment loans in 39 states. The company was founded in 2018 and offers fix-and-flip loans, rental property loans, and ground-up loans. They only finance non-owner-occupied properties in urban or suburban areas with 1–50 units. Closing can take five to 10 days, or longer, depending on the area the property is located in.

Lending clientele: Residential real estate investors

Loan criteria: Varies by loan program

New Silver maintains a 3.9-star rating on Google. Clients commend the company for their quick closings, prompt communication, and high loan-to-value ratios. Negative reviews mention misleading information on their website and an unprofessional operator.

newsilver.com

855-844-5626

We Lend LLC

We Lend LLC, based in New York City, is a private lender specializing in hard money loans. The company was founded by experienced real estate professionals and focuses on financing real estate investors. It offers a range of loan programs, including fix-and-flip, rental property, and new construction loans.

Lending clientele: Residential and commercial real estate investors

Loan criteria: LTV 85% up to 90% of ARV

We Lend LLC has earned a 4.7-star rating on Google. Clients often highlight the company’s efficiency and personalized service.

welendllc.com

212-777-7780

Should I partner with a hard money lender in Albany?

Hard money loans are ideal for real estate investors in Albany who need quick financing for property flips, renovations, or commercial ventures. These loans provide flexibility and fast funding, but they come with higher interest rates and shorter terms than traditional mortgages. If you’re experienced in real estate and need quick capital to secure a deal, partnering with a hard money lender could be a smart choice.

For homeowners who want to avoid the costs and complexities of a hard money loan, HomeLight’s Buy Before You Sell program offers a simpler solution. This program helps you secure your next home before selling your current one, giving you financial flexibility and control over your timeline.

Ultimately, the decision to work with a hard money lender comes down to your specific financial goals and how quickly you need to act. Whether you’re an investor looking for quick cash or a homeowner looking for a smoother transition, Albany offers various options tailored to your needs.

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