Hard money is an alternative type of funding that comes from non-traditional mortgage lenders. Each lender may differ, but loans are funded by individuals or investors who are looking to deploy capital on real assets.
The loans funded by Capital Fund 1 fall into the latter category. Our capital comes from hundreds of investors who have entrusted us to find secure and stable real estate investments.
So, what is Hard Money?
99.9% of lenders are solely concerned about how to recoup their capital with each loan they lend out. That concern typically manifests through creditworthiness checks, the value of collateral, income statements, tax returns, and more. However, with hard money, the greatest weight is given to the value of the real estate put up as collateral.
In essence, hard money lenders can lend money to real estate investors without the typical stack of paperwork and steps required by traditional mortgage lenders. At Capital Fund 1 for example, we do not check a borrower’s credit, financial, or even require a property appraisal.
Why Doesn’t Everyone Use Hard Money?
Hard money, like all things in the world, is not a one fit solution for everyone. CF1’s loans are designed for short-term (under 5 years), non-owner-occupied investment properties. Meaning we cannot lend on real estate intended as the primary residence as the borrower.
CF1 loans are also monthly interest-only payments for the duration of the loan term. So, if you are looking to hold a property for the long term, we recommend you use a CF1 loan to quickly acquire a property and then refinance into a more traditional loan program like this (LINK).
Our Speedy Process:
Since CF1 is primarily concerned with the value of the real estate asset, our team can evaluate, underwrite, process, and fund a loan in as little as 24 business hours (if title commitment is ready). We can do this because we always have capital ready to deploy.
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Deal Evaluation:
Our CF1 loan origination team individually evaluates each loan request to ensure it is a good fit for Capital Fund 1. From the moment you submit a request, an LO is assigned to your file and will be your point of contact. Your LO ensures your loan file is 100% complete before handing it off to underwriting. -
In-house Underwriting Team:
Unlike other lenders, CF1 has invested in an underwriting team to ensure we can turn loan quotes around within hours. Our investment does not just include staff, but also proprietary underwriting software we have developed to identify the true market value of properties. In September, we decided to release the software at no cost to real estate investors like you. If you are interested, read more here (LINK). -
In-house Processing Team:
Once we receive the go-ahead to move forward with your loan, our processing team gets your file ready for closing. To ensure our process is as quick and efficient as possible, we have doubled the team in the past year. Here, everything from signed documents to insurance is collected and processed.
Want to learn more?
A CF1 hard money loan can be a powerful tool to expand your real estate business. If you would like to chat with a CF1 LO, directly find time on their calendar here (LINK). Read more on our Real Estate Guide below (MENU)