Hard Money Lender Recommendations?

Question

Looking at building a spec home here soon and digging into wether we should use a construction loan or a hard money lender? Any advice?

Account Closed · Answer

If you’re flipping the spec home or need to move fast: Hard money is likely your better option.If you’re building-to-hold and have strong credit, docs, and time: Construction loan might save you money.

Joanna Dudley · Answer

Hi Anna,

I’m Joanna, the owner of New Horizons Funding Solutions. I work directly with real estate investors to provide flexible, reliable funding for development projects and long-term investments.

I came across your post about Hard Money Lender recommendations, and it sounds like we might align well. I’d love to learn more about what you’re working on and explore how we can potentially collaborate.

Would you be open to a quick call this week?

Looking forward to connecting!

Judah Zuckerman · Answer

Hi Anna,

I am a Direct Lender Nationwide, and this construction loan is right in our wheelhouse

on construction were at 10% AND up To 85% LTC

Dominic Glass · Answer

I'd love to help! PML and HML available.

Johnny Curran · Answer

Great question! I fund projects like this regularly—spec builds can definitely benefit from the speed and flexibility of hard money, especially if you’re trying to move quickly or avoid the red tape of banks. Happy to share some insights and options with you. Dm you!

Erik Estrada · Answer

Hi Anna,

Have you completed any construction projects in the last 5 years? or heavy fix and flip renovations?

Doug Coldren · Answer

Hi Anna, I’m the assistant to Douglas Coldren, a private money lender and broker at DC Capital Lender. We help investors like you who are working on spec builds decide between new construction loans or hard money based on deal size, budget, and timeline.

We can go over a few options that could match your strategy and save time. What’s the best number to reach you at, and when would be a good time for a quick call?

Mike Klarman · Answer

Is it an investment home?  Is there a land purchase involved or has been done prior?  Has all the horizontal work been done?

Tyler Reed · Answer

Hi Anna,

Great question, and the answer is dependent on a few other factors. If it is your first home you are building, and you have time to go the conventional route, the rates are going to be better. If you are planning on doing more of these builds, you will run out of debt to income runway and need other sources of capital sooner or later. Good to have as many options for financing that you can, so talk with lenders, get their best offer, and get a feel for who you would like to work with.

Seth Teel · Answer

@Anna San  I've built a couple spec homes in the last 5 years.  I found trying to use a traditional lender, including local banks that hold their own paper, was still very tough to get underwritten, and the process was extremely cumbersome.  That was with an 800+ credit score & 50 renovation projects done personally, and having homebuilder project management experience. Those types of lenders are much more suited for an owner occupant new construction loans.

When it comes to using hard money for a ground up spec build, most lenders require at least one new construction build of experience.  A few will let you use previous renovation/flip experience to qualify for the new construction loan. If you have zero experience for both it will be difficult to qualify for the loan without partnering with some that does.

With a hard money GUC loan rates are typically 10% -14%. Origination fees range 1 - 4 points.  Terms: 6months - year, with optional extensions.  Very few lenders will lend on the lot acquisition as well as the construction costs. Most require you to have full ownership of the lot and fund 100% of the construction costs. That being said some lenders will allow a subordination agreement for the lot.

Let me know if you have additional questions.  I have been through this process personally as well as with my clients both on the RE Brokerage and HM Lending sides of the transaction.