Hard money loan questions, answered

A hard money loan is a mortgage on an investment property funded by private institutional investors instead of a bank. It is approved on the property and the deal: either the property’s value after renovation, or its ability to cover the payment from rent. There is no job history or debt-to-income review.

Boston Fix and Flip Loans is the Massachusetts division of Optimus Capital Corp, a nationwide hard money lender that works only with real estate investors. The division is run by Andrew Shanti, who has worked in lending and real estate since 2005.

We lend on investment property in Boston and throughout Massachusetts, including Worcester, Springfield, Cambridge, Lowell, Brockton, Quincy, Lynn, New Bedford and Fall River. Our Massachusetts office is at 205 Clifford St, New Bedford, MA 02745. Through Optimus Capital Corp we also finance property across the United States.

Fix and flip loans, DSCR rental loans for long-term and short-term rentals, new construction loans, mid-rehab and construction completion loans, rental portfolio loans, and commercial loans on multifamily, hospitality, office, industrial and retail property.

The answer depends on the property. For a fix and flip or new construction, choose a hard money lender that funds the rehab and closes quickly. For a rental, choose a DSCR lender that approves the loan on the rent and lends on two- to four-family homes. Boston Fix and Flip Loans offers both and lends only on non-owner-occupied property. See investment property loans in Boston.

It means the borrower will not live in the property. Flips, rentals and new builds for sale are non-owner-occupied, and they are financed with business-purpose loans. Every loan we make is on non-owner-occupied property.

No. We lend only on investment property. The one exception is commercial property that the owner’s business occupies. If you are buying a home to live in, a conventional NMLS-licensed mortgage broker is the right place to start.

Generally no, apart from large commercial loans. On most loans the only cost before closing is the appraisal, which you pay directly to the appraisal company.

Programs start at a 600 credit score. Rental loans are available at 600 at up to 70% loan-to-value. Fix and flip loans are also available down to 600 at reduced leverage, and the best terms, up to 90% of purchase and 100% of rehab, are for scores of 720 and above. The reason for a low score can affect what is available.

No. Hard money loans do not depend on job history or personal income. We look at three things: enough liquidity to buy and carry the property, a property that can cover its payments now or after the work is done, and a credit history that shows you pay on time.

No. These are business-purpose loans and do not report on your personal credit the way a conventional mortgage does.

No. There is no limit on the number of properties we will finance for one investor.

Yes. If you use an LLC, we will ask for the articles of organization, the EIN letter from the IRS, a signed operating agreement showing ownership percentages and, if the LLC is more than a year old, a certificate of good standing.

Yes. A DSCR loan is approved on the property’s debt service coverage ratio, which is the rent divided by the full monthly payment. A ratio of 1.0 or better is preferred. Strong borrowers can qualify below 1.0 at lower leverage, and a no-DSCR program is available at a higher rate.

On projected annual short-term rental income instead of long-term market rent, using 12 months of income history or AirDNA projections. Call (954) 598-4564 for a free analysis of a specific property.

Yes. Both can be financed, usually at slightly lower maximum leverage than a standard rental.

Yes. Foreign national borrowers can finance investment property through our rental loan programs.

Fix and flip loans average up to 21 days and can close in about 7 days when title and insurance are complete. Rental and DSCR loans take about 30 days, including the appraisal.

The minimum loan is $75,000. The maximum is above $10 million.

From 6 months to 30 years. Fix and flip loans run 6 to 24 months with interest-only payments. Rental loans are fixed for 5 to 30 years.

Fix and flip loans have none. Rental loans offer a 3-year or 5-year prepayment penalty, with the 5-year option typically priced about 0.25 to 0.5% lower, or no penalty at a higher rate.