Hard Money Lenders Ohio: Fast Real Estate Financing
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Sam Dadofalza Associate EditorClose
Sam Dadofalza Associate EditorSam Dadofalza is an associate editor at HomeLight, where she crafts insightful stories to guide homebuyers and sellers through the intricacies of real estate transactions. She has previously contributed to digital marketing firms and online business publications, honing her skills in creating engaging and informative content.
Are you seeking funding for your next real estate investment project in Ohio? You might want to consider a hard money loan. Whether you’re looking to flip a fixer-upper in Cincinnati’s Over-the-Rhine or invest in a rental property in the heart of Cleveland, hard money lenders in Ohio offer the speed and flexibility that traditional loans might not provide.
This type of financing serves as an alternative financing option, particularly valuable for those with tight project timelines, limited initial capital, or credit challenges.
Start Making Offers Without Waiting to Sell Your Home
Through our Buy Before You Sell program, HomeLight can help you unlock a portion of your equity upfront to put toward your next home. You can then make a strong offer on your next home with no home sale contingency.
However, if you’re not an investor but need to bridge the gap between buying and selling your home, we’ll explore some viable alternatives to help you leverage your home’s equity. This guide will walk you through the essentials of hard money lending in Ohio, helping you determine if this financial tool fits your real estate investment or home-buying needs.
What is a hard money lender?
A hard money lender is a private individual or company that provides short-term loans secured by real estate. Unlike traditional lenders, who focus heavily on the borrower’s creditworthiness, hard money lenders emphasize the value of the property used as collateral. They often work with real estate investors, including house flippers and rental property buyers, who need quick access to funds and flexible terms.
To determine the loan amount, hard money lenders use the after-repair value (ARV), the estimated value of a property after renovations. Typically, they lend a percentage of the ARV to ensure the investment’s security and profitability.
Interest rates on hard money loans are higher, often ranging from 8% to 15%, with additional costs like origination fees and points. If a borrower fails to repay, the lender can seize the property to recover their investment.
How does a hard money loan work?
If you’re a real estate investor in Ohio searching for a flexible financing option, connecting with hard money lenders could be a smart move. Here’s a brief overview of how hard money loans work:
- Short-term loan: These loans typically have a repayment period of six to 24 months, unlike the 15- or 30-year terms of conventional mortgages.
- Faster funding option: Hard money loans can be approved within days, compared to the 40 to 50 days typical for a mortgage loan.
- Less focus on creditworthiness: Approval is less dependent on your credit score and income history and more on the property’s value.
- Greater scrutiny on the collateral: These loans are secured by collateral and are based on the loan-to-value ratio of the property.
- Non-traditional lenders: Hard money loans are typically offered by individual investors or private lending companies rather than traditional banks.
- Loan denial: These loans can be an option for those with poor credit who have been denied a mortgage but have significant home equity.
- Higher interest rates: Due to the higher risk, hard money loans come with higher interest rates compared to traditional mortgages.
- Larger down payments: Borrowers may need to come up with a larger down payment, sometimes up to 20% to 30% of the property’s value.
- More flexibility: With fewer regulations, hard money lenders can offer flexible terms, helping borrowers avoid foreclosure and meet various criteria.
- Interest-only payments: Unlike traditional mortgages, hard money loans may allow for interest-only or deferred payments initially.
What are hard money loans used for?
Hard money loans are a go-to option for certain real estate deals in Ohio. Investors often use them when they need fast funding or when traditional bank loans aren’t an option. Here’s a closer look at common uses for hard money loans:
Flipping a house: For Ohio investors who flip homes, hard money loans make it easy to get cash fast for buying and fixing up properties. They help flippers secure deals quickly, finish renovations, and turn the property around for a profit in a short time.
Buying an investment rental property: Investors buying rental properties can use hard money loans to move fast, especially if the place needs quick repairs. Unlike bank loans, hard money loans let landlords get the work done right away so they can start earning rental income sooner.
Purchasing commercial real estate: Hard money loans are a popular pick for buying commercial properties because they’re flexible and get approved fast. When timing matters, these loans help investors lock in good deals quickly
Borrowers who can’t qualify for traditional loans: Individuals with substantial home equity but poor credit or other disqualifying factors may turn to hard money lenders for financing. These loans are approved based on the property’s value rather than the borrower’s credit score, making them more accessible.
Homeowners facing foreclosure: Homeowners nearing foreclosure might use hard money loans to refinance their debts or buy time to sell their property. This option can help them avoid losing their homes or having a foreclosure mark on their credit reports.
How much do hard money loans cost?
Hard money loans typically come with higher costs due to the added risk and convenience they offer. Here are some common expenses:
- Interest rates: These can range from 8% to 15%, depending on the lender’s risk assessment.
- Origination fees: Lenders may charge 1% to 5% of the total loan amount.
- Closing costs: Additional fees at closing can include legal fees, appraisal fees, and other administrative costs.
- Points: Lenders might charge points (a percentage of the loan amount) upfront, adding to the initial cost.
Online hard money loan calculators can help you estimate these costs.
Alternatives to working with hard money lenders
If you’re a homeowner, rather than an investor, who is looking for a way to leverage your current home’s equity, here are a few options to consider:
Take out a second mortgage: If you have substantial equity in your home, a home equity loan or home equity line of credit (HELOC) can provide funds at a lower interest rate compared to a hard money loan.
Cash-out refinance your home: This option allows you to refinance an existing property, pulling out cash to finance your new investment. It often comes with lower interest rates than hard money loans.
Borrow from family or friends: A personal loan from family or friends can offer flexible repayment terms and potentially lower or no interest rates, making it a more affordable option.
Use a government-backed loan program: Programs offered by the FHA, VA, or USDA can help buyers purchase homes with lower down payments and reduced interest rates.
Consider peer-to-peer loans: These loans are provided by individual investors through lending platforms. They function similarly to hard money loans but often have different terms.
Explore specialized loan programs: If you already have a hard money loan and want to replace it, consider specialized loans for fixer-uppers or investment property refinancing.
Request a seller financing option: In some cases, sellers may agree to finance the purchase themselves, resulting in lower closing costs and less stringent eligibility requirements.
How to buy before you sell
Sometimes, your dream home hits the market when you least expect it. Maybe it’s a historical property in Columbus’ German Village or a charming colonial with acreage in Toledo. For Ohio homeowners wanting to buy a new home before selling their current one, HomeLight provides a seamless solution.
The Buy Before You Sell (BBYS) program lets you tap into your home’s equity to make a strong, non-contingent offer on a new property. With quick approval in 24 hours or less and no initial cost or obligation, you can secure your new home first. This means you can move in without the stress of double moves and then sell your old house vacant.
Here’s how HomeLight Buy Before You Sell works:
Although the program comes with a flat fee based on your current home’s sold price, the potential savings in other areas can be significant. You might save on moving costs, temporary housing, and even negotiate a better price on your new home. Plus, HomeLight’s BBYS fees are generally much lower than the interest rates on bridge loans, which range from 9.5% to 12%.
3 top hard money lenders in Ohio
Finding the right hard money lender can make all the difference in funding your real estate projects quickly. Ohio offers several reputable lenders who specialize in fast, flexible financing for investors and homebuyers alike. Here are three top hard money lenders in the state to consider for your next deal.
Dayton Capital Partners
Dayton Capital Partners, founded by experienced real estate investors, provides hard money rehab loans. Their primary focus is single-family homes and small multifamily properties, though they also finance condos, townhouses, and select commercial assets.
They offer no loan minimum for properties in Dayton, Cincinnati, and Columbus, with a $75,000 minimum for projects outside those areas. The company is known for keeping fees low and offering straightforward 12-month terms. Qualified borrowers may also receive extensions, adding flexibility to their projects.
Lending clientele: Residential and commercial real estate investors
Loan criteria: The typical down payment is 25% of the purchase price, with a minimum requirement of $15,000. Dayton Capital Partners typically finances 100% of the rehab costs, with an interest rate of around 12%.
Dayton Capital Partners earned a 4.3-star Google rating from over 20 reviews. Clients commend their willingness to answer questions, streamlined lending process, and quick closings. Reviewers emphasize how easy it is to work with the team and appreciate the simplified paperwork, which allows them to focus on their projects. Many return for multiple deals, citing Dayton Capital as a trusted and dependable partner for ongoing investment opportunities.
Website: daytoncapitalpartners.com
Phone number: 937-240-1805
Tidal Loans
Tidal Loans specializes in flexible fix-and-flip and bridge financing solutions. Founded in 2016, the firm’s team brings over 50 years of combined experience in the real estate industry.
Once all required documentation is submitted, loans can typically be closed within a week through the company’s streamlined process. Tidal Loans provides funding for single-family and multi-family residential investment properties.
Lending clientele: Residential real estate investors
Loan criteria: Up to 70% ARV
Tidal Loans earned a high Google rating of 4.7 stars, as many clients report receiving exceptional service. First-time users navigating fix-and-flip deals highlight the team’s professionalism, attentiveness, and dedication to addressing every concern. Others note that Tidal Loans prioritizes clients’ needs long after the initial transaction, consistently exceeding expectations with thoughtful service.
Website: tidalloans.com
Phone number: 832-757-1262
Easy Street Capital
Easy Street Capital is a Texas-based private real estate lender operating in 47 states, including Ohio. They offer three hard money loan programs: EasyFix for flippers, EasyRent for landlords, and EasyBuild for builders. The company works with investors of all experience levels and across a wide range of project types. With a streamlined process, their loans can close in under 48 hours.
Lending clientele: Residential real estate investors
Loan criteria: Up to 75% LTV
Earning various praises from clients, Easy Street Capital holds a 4.5-star Google rating based on over 200 reviews. Clients appreciate the team’s willingness to go above and beyond, quick turnaround times, and competitive terms.
Some highlight that the company makes funding fix-and-flip projects straightforward and stress-free. Others point to the team’s readiness to help, even outside regular business hours. Many appreciate the seamless process and dependable support from start to finish.
Website: easystreetcap.com
Phone number: 866-828-0062
Investing in real estate?
Hire an investor-friendly real estate agent who can help you get access to off-market properties at a discount and assess potential rental income based on market trends. HomeLight can connect you with investment property specialists at no cost.
Should I partner with a hard money lender in Ohio?
The decision to work with a hard money lender in Ohio should ultimately depend on your specific needs and real estate goals. This type of financing is a great option for real estate investors who need quick cash and can handle higher costs and shorter repayment terms. If you need fast, flexible financing that traditional loans can’t provide, a hard money lender in Ohio might be the right fit.
For homeowners looking to use their home equity without incurring high interest rates, HomeLight’s Buy Before You Sell program is a viable option. This program allows you to make a strong, non-contingent offer on a new home, resulting in a smoother, less stressful moving process.
As with any major financial decision, it’s important to consider your long-term strategy and consult a financial advisor. If you’re ready to explore hard money lending or want to learn more about leveraging your home’s equity, HomeLight can connect you with top professionals in Ohio who understand your unique needs and investment criteria.
Header Image Source: (DJ Johnson / Pixabay)
Editor’s note: This post is for educational purposes only and should not be considered financial advice. HomeLight encourages you to consult your own advisor.
At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.