Hard Money Lending in South Dakota

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Hard Money Lending in South Dakota

Sean Meyer
Member since 2022 · 1 post · 0 votes

Hello, 

I’m looking to invest in a multi-family property with multiple investors. We don’t believe that taking a conventional route is the way to go from the start. We are discussing the possibility of pursuing a hard money lending option. However, there is not a lot out there on the logistics of hard money lending in South Dakota. I’ve heard different things from different people, but can’t seem to get a definitive answer as to whether it’s available or not. Does anyone have any advice when it comes to this topic? And if it is a viable option, any suggestions on specific lenders to contact that will service the Sioux Falls, SD area? 

Thanks! 

Sean 

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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    3y
    Quote from @Sean Meyer:

    Hello, 

    I’m looking to invest in a multi-family property with multiple investors. We don’t believe that taking a conventional route is the way to go from the start. We are discussing the possibility of pursuing a hard money lending option. However, there is not a lot out there on the logistics of hard money lending in South Dakota. I’ve heard different things from different people, but can’t seem to get a definitive answer as to whether it’s available or not. Does anyone have any advice when it comes to this topic? And if it is a viable option, any suggestions on specific lenders to contact that will service the Sioux Falls, SD area? 

    Thanks! 

    Sean 


     Hey Sean, 

    Any specific reason why you would want to go hard money? If this is for a long term hold with no repairs, you could look into DSCR Loans.

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  • Sarah HattonPro Member
    Lender · San Diego · Member since 2021 · 80 posts · 56 votes
    3y

    Hey Sean, 

    There are a handful of states that require lenders to be licensed in that state with a physical office to conduct business; ND, SD, NV, VT are a few that come to mind. The 'work around' some lenders do is register with a licensed broker to run their loans through. There's some gray area around wether this is legally acceptable, I've heard horror stories from a lender who did this and was still fined heavy penalties by the state. I think ultimately the level of entry and risk is higher for smaller lenders so it's easier to stay out of these states. DSCR loan many be a better option; these larger institutions are more capable of entering these markets. Happy to help out there if interested, otherwise best of luck on the loan hunt!

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