California Hard Money Lenders

Hard Money in California

California is the most popular state in the U.S. for private money lending. Volatile property markets in large cities such as Los Angeles, San Diego and San Francisco have made prices rise and fall rapidly, creating environments where investors with superior timing and a taste for risk can profit from real estate investments. These speculators have a need to buy quickly, and if unable or unwilling to produce sufficient cash of their own, must rely on hard money loans and private individuals capable of making up the shortfall. In addition, it follows that the largest state in the nation in terms of population would also be the most active in terms of the number of mortgage lenders of any type, including hard money lenders.

California hard money lenders tend to be private individual investors who wish to invest at least a portion of their wealth in mortgage backed assets such as private money loans. These lenders may aggregate their funds into relatively small pools and appoint a manager to control their disbursement. This contrasts with other states where it may be more common to see larger lending institutions or even private equity involvement in hard money lending. The outcome for the borrower is largely the same however.

MoolahList.com strives to list enough hard money lenders for the average prospective borrower of a private money loan to be able to secure funding within a reasonable amount of time. It is no longer common however for hard money loans to be the “zero money down” loans that were so common in the past. Losses incurred by many lenders during the financial crisis starting in 2007 have generally put an end to that practice. The current methodology instead tends to require borrowers to invest some of their own cash into the deal, thus reducing the risk that they will walk away from their mortgage obligation and forcing the lender to foreclose. Even if the borrower can prove that the property is being purchased at a significant discount from the appraisal value, it would be unusual for a borrower to find financing without having some of their personal capital at risk in the venture.

Yet for Californian real estate investors the best option for financing an investment or development project is often private money. Conventional institutions will not allow the financing of properties in disrepair under any conditions. Banks and ordinary mortgage lenders usually will not allow a corporate or business entity to hold title to property they are financing. In addition, these mortgages can take months to close –a problem that many sellers are aware of when they require that buyers pay for their property with “cash only”. Consequently, many real estate investors in California will miss out on the premium deals for lack of the liquid capital required for.

MoolahList’s directory of lenders in California is our most extensive and includes mortgage lenders in Los Angeles, San Francisco and San Diego. Additionally, there are many lenders on this list who will lend throughout the state, on any property that exists within the borders of California or for that matter, on any property within the United States.