7 Best Hard Money Lenders in Michigan

The state of Michigan may be known for its location on Lake Michigan and its manufacturing industry, but it has a lot more to offer those who live here as well. Michigan is in the upper Midwestern portion of the country. Its capital is Lansing, but other larger cities in the state include Detroit, Ann Arbor, Grand Rapids, and Flint. Overall, 10 million people live in the state, making it the 11th largest by population. It has a strong economy that’s built up by its manufacturing, agricultural, and tourism industries. Even with all of this industry, Michigan is a beautiful location noted for its stunning natural landscapes, historic sites, and recreational activities that range from hiking to skiing.

It’s also a competitively affordable place to live. Michigan’s real estate market is competitive, and while most areas have seen property values rise over the last decade, the rate of increase has not been as large as in some other states. That’s a good thing since the cost of living here is lower. The average purchase price of a home in Michigan is $253,557 according to the Michigan Realtors Association. Many people who purchase their homes here do so because of the ability to build steady equity in the property. There’s new construction present in many areas and urban, more rental-prone areas in the Metro Detroit area.

In Michigan, 73.3 percent of people own their home, and 26.7 percent rent, according to data from the U.S. Census Bureau. That’s about average across the country. In addition, 5.2 percent of rentals are vacant, which could indicate there is some demand for additional rental income in the state. Some areas are more likely to be rented properties, especially in the more urban areas of the state.

How hard money loans work in Michigan

A hard money loan is a type of asset-backed real estate loan. Private money lenders, investors or groups of investors working as a financial investment firm work to provide these types of rehab loans to borrowers. As an asset backed loan, there is a bit less risk to the lender because they can foreclose on the home if the borrower stops making payments as agreed. What makes these loans unique is that they are not from traditional mortgage lenders like big banks or credit unions and have less overall oversight compared to traditional residential mortgages.

Hard money lenders in Michigan offer competitive interest rates on these property loans, but they tend to be higher than traditional loans. That is typically due to the higher level of risk lenders must take on when financing these loans. Interest rates are typically lower if the borrower has good credit qualifications, a solid down payment for the purchase, and a property that can easily be seen as a valuable investment to be made. Most lenders are flexible and willing to work with borrowers within reason. That helps to make these loans more attractive to borrowers overall.

Most hard money loans in Michigan are used for fix and flip homes, rental properties, bridge loans, or other types of commercial real estate investment. They are also short term loans, often lasting between 1 and 5 years. Borrowers need to obtain funds to purchase a piece of commercial or residential property now but know they will be able to refinance within a few months or years, and those who are buying a property that needs to be renovated can benefit the most from this. The good news is that these loans tend to have fewer complications than traditional loans, which makes them easier to obtain for many borrowers.

7 Top Michigan hard money lenders

Some lenders only offer hard money loans to experienced investors, while other programs can lend to those that are pursuing their first real estate investment.

1. New Silver

New Silver started in 2019 by Kirill Bensenoff and Alex Shvayetsky. They offer a variety of private money lending products like fix and flip, rental, ground up and personal loans.

We contacted New Silver Lending to learn more about their private lending business and here are some of the highlights:

• Origination fee from 1.875%
• Loan to cost up to 90%
• 100% construction financing available
• Loan to ARV up to 80%
• Terms are typically 24 months
• Loan amounts are from $100,000 to $5 million
• Minimum FICO score is 650
• No hard credit pull required

When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.

2. Lima One Capital

Lima One Capital is based in Greenville, South Carolina and founded by former Marines. They lend throughout the United States and offer typical private money lending products like Fix and Flip, bridge loans, construction loans, rental loans and multi-family loans.

We contacted Lima One Capital to learn more about their private lending business and here are some of the highlights:

• For Fix and Flip loans, up to 90% LTC and 70% LTV for loans from $75K to $3 million
• 12, 19 and 24-month terms available
• Interest only loans
• For Fix and Rent loans, can finance single properties or portfolio loans with 5, 10, 30-year term options available
• For rental property, can fund loans from $75K to $1 million up to 80% LTV on purchases and refinances.

When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.

3. HouseMax Funding

HouseMax Funding is based out of Austin, Texas but has a national footprint when it comes to real estate business. Started by Jeff Fetcher and Alex Morris, HouseMax provides asset-based loan financing to investors for real estate transactions.

We reached out to HouseMax to learn more about their hard money lending program and here is what we found:

• Minimum loan amount is $75,000
• Lends up to 75% of the after-repair value (APV)
• 1-3 points origination fee
• 3 months reserves required
• Direct lender that approves loans internally and funds using their own private capital.
• Lends in urban and suburban communities in all 50 states.
• Goal is to close loans in 10 days or less.
• Specializes in fix & flip loans, construction and rental loans
• Multi-family and commercial properties are ok

When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.

4. Stratton Equities

Stratton Equities is a nationwide direct hard money lender for real estate investors. Founded by Michael Mikhail in 2017, Stratton Equities has over five years of experience in the private lending market.

We reached out to Stratton Equities to get more information about their hard money lending program and here are some highlights:

• Loan amounts from $100,000 up to $5 million
• Investment properties only
• Single-Family, Condos, Townhomes, Multi-Family, Commercial, Mixed-Use, Office, Retail, Industrial and Warehouse are all ok
• Up to a 75% LTV
• Rates start at 7.25%
• Interest only payments
• Loan terms are 9-24 months
• Foreign nationals are eligible
• No prepayment penalty option is available

When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.

5. EquityMax

EquityMax is based out of Florida and most of its business in the state but is able to lend throughout the United States. Founded by Brad Emmer in 1990, EquityMax has decades of experience as a hard money lender.

We reached out to EquityMax to learn more about their hard money loans and these are the key highlights that you need to know:

• Single Family Homes
• 1-4 Multi-Unit Properties
• Condos and Townhomes ok
• Commercial property and Industrial Warehouses OK
• Direct lender that has decision making over financing deals.
• Can originate loans to individuals, LLCs, corporations, land trusts and self-directed IRAs.
• No prepayment penalties
• No minimum credit score required

When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.

6. Fund That Flip

Fund That Flip is a hard money lender based in New York that focuses on short term bridge loans for real estate investors looking to flip properties. Founded by Matt Rodak in 2014, Fund That Flip lends in most states.

We contacted Fund That Flip to learn more about their bridge loan program and here is what we found:

• Up to 80% LTC and 70% ARV ratios for your project
• Rates start at 9.99%
• Direct lender with discretionary capital
• Construction projects ok
• 10% down payment required

When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.

7. Easy Street Capital

East Street Capital is based in Austin, Texas but lends nationwide except in North and South Dakota. Founded by Stephen Hagerman in 2016, Easy Street Capital has over six years of experience in the real estate investing world.

We reached out to Easy Street Capital to learn more about their hard money loans and this is what we found:

• Interest rates range from 6.9% – 10.9%
• Points range from 2-3
• There is a $1495 document fee
• No minimum credit score required
• Down payments of at least 10% required
• Renovation financing ok
• Fix and Flip loans do not typically have prepayment penalties

When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.

How are Michigan hard money loans from other financing options?

A number of differences exist with Michigan hard money loans. The first is that these loans provide borrowers with access to a larger amount of money, in some cases. In a traditional mortgage, the amount borrowed must be no more than the current appraised value of the home. With hard money loans, the value can be higher based on the after repair value of the home. Since many borrowers use these loans to purchase property that needs significant repair or upkeep, they can secure funds to help with the renovations, too, because the value of the home is expected to be much higher after the repairs are complete.

Interest rates and fees are higher for most Michigan hard money loans. This could increase rates from 8 to 15 percent, and sometimes more. Because these loans carry more risk and are for a shorter term, many lenders charge a higher interest rate to protect their investment. There are also more fees involved in these loans in many situations.

Keep in mind that Michigan hard money lenders may have fewer requirements and steps to accomplish during the closing process. That often means that a fast close may be an option for these types of purchases. That’s unlike a traditional bank, which may take up to 90 days to close on a home, time that some investors just do not have.

Also notable is that lenders tend to be more in control over what they offer and the terms they provide. That provides a benefit to borrowers because it means lenders may be willing to adjust the length of the loan, down payment requirements, credit score requirements, and other features to better meet the needs of the borrower. Of course, they will only do this when it sounds like a good investment and the borrower is capable of making payment on the borrowed funds as agreed.

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