5 Top Hard Money Mortgage Lenders You Should Know

Did you know that 94% of U.S. hotel investors plan to maintain or increase their investments in hotels this year? 📈 This surge in investor confidence, paired with a dynamic market, means that capitalizing on the right opportunity—like a hotel fix-and-flip or acquisition—demands lightning-fast access to capital. Waiting on a traditional lender can cost you the deal. This is where hard money Mortgage Lenders come in. They are short-term, asset-based loans provided by private lenders. Hard money loans are valued for their speed and flexibility, focusing more on the property’s value than the borrower’s credit score. 🤝

This post will cut through the clutter and introduce you to 5 of the best hard money mortgage lenders for hospitality real estate. As a leading correspondent and table funder, HotelLoans.Net understands the unique challenges of this market. We know that securing the right financing is crucial for your success. Our expert financial consulting is designed to help you navigate these complex waters and find the perfect loan for your needs.

What Are Hard Money Mortgage Lenders?

Hard money mortgage lenders are non-traditional lenders. They are often private individuals or small companies. They lend money based primarily on the property’s value, not the borrower’s financial history. The property itself acts as the primary collateral. This approach differs significantly from a conventional loan. Conventional lenders focus on your credit score, income, and debt-to-income ratio. Hard money lenders are more interested in the After-Repair Value (ARV) of the property. This makes them an excellent option for investors who need to close a deal quickly.

Hard Money Mortgage Lenders vs. Conventional Loans

Key Characteristics

Speed and Efficiency: Hard money loans can close in days. This is perfect for time-sensitive deals. There is less paperwork and a more streamlined approval process.

Flexibility: The terms are often customized. Lenders and borrowers can collaborate to create a deal that suits the project. This includes interest-only payments or balloon payments.

Higher Costs: It’s essential to know the costs. Hard money mortgage lenders typically offer interest rates higher than those of conventional loans. You will also pay fees, such as origination points. These costs are a trade-off for the speed and flexibility.

Who Uses Hard Money Loans?

People who use hard money mortgage lenders for fix-and-flip projects are a standard client base. Developers also use them to get quick access to capital for a new build. Even those with bad credit can obtain a loan through hard money mortgage lenders. This is because the property’s value is the primary focus, not its credit history.

How to Find the Right Hard Money Mortgage Lenders for You

Finding the right lender is crucial for your project’s success. Here is a simple guide on how to find hard money mortgage lenders who are a good fit for you.

First, do your research. Look for online reviews and testimonials. What do other investors say about them? A lender with a strong reputation is more reliable. Next, check their track record. How many deals have they closed? Do they specialize in hospitality properties or fix-and-flips? Experience matters.

You must also verify their licensing. Hard money lending is regulated at the state level. For instance, if you are looking for the best hard money mortgage lenders in California, ensure they are correctly licensed to operate there. This protects you and provides a legitimate transaction.

Transparency is key. The best lenders are open about their terms and fees. They should give you a clear breakdown of interest rates, origination points, and any other costs upfront. Avoid lenders who are vague or hard to get a straight answer from.

Finally, think locally. Look for private hard money mortgage lenders near me. A lender who understands your specific market can be a huge advantage. They know local property values, market trends, and a network of professionals. This regional insight can make the difference between a successful deal and a missed opportunity.

Top 5 Hard Money Mortgage Lenders You Should Know

When selecting a hard money mortgage lender, it’s not just about the interest rate. The right lender for you will offer a mix of speed, flexibility, and expertise. The top five lenders on this list were chosen based on the following criteria:

• Reputation and Experience: A proven track record in the industry, with positive client testimonials and a strong history of successful closings.
• Transparency: Clear and upfront communication about all terms, fees, and conditions, with no hidden surprises.
• Loan Variety: A diverse range of lending programs to suit different investment strategies, from fix-and-flips to ground-up construction.
• Speed and Efficiency: A streamlined application and funding process that can close deals in days, not weeks.
• Customer Service: A commitment to a personalized approach and a deep understanding of the borrower’s needs.

Here are five top hard money mortgage lenders to consider for your next hospitality real estate investment.

Lender #1: Kiavi

About the Lender: Kiavi is a technology-enabled hard money lender. They are one of the largest private lenders for real estate investors in the United States. They have funded thousands of deals and specialize in investment properties. Their business model is built around speed and using technology to make the loan process more efficient.

Why they stand out:

• Fast Closings: Kiavi is known for its ability to close a deal in as little as 7 days. This speed is critical in a competitive market.
• Technology-Driven Process: Their online platform makes it easy to apply, track your loan, and receive funds.
• High Leverage: They offer up to 100% of the purchase price and 100% of the rehab costs. This can significantly reduce the amount of cash you need to bring to the table.
• No-Doc Loans: For qualified borrowers, they can offer loan products with minimal documentation, which speeds up the approval process even further.

Lending Programs: Kiavi offers a range of programs that are well-suited for hospitality investors. Their core products include hard money mortgage lenders for commercial property and residential investment properties. They provide fix-and-flip loans, bridge loans, and new construction financing. They also offer DSCR rental loans for investors looking to buy and hold properties for long-term cash flow.

Real-life example/case study: A real estate investor in Dallas, Texas, identified a small, distressed motel that was an ideal candidate for a fix-and-flip. The motel was priced to sell quickly, and the investor knew they had to move fast to secure the deal. Traditional banks were quoting a 60-day closing period. The investor turned to Kiavi and used their online platform to submit a loan application. Within a week, the loan was approved and funded, allowing the investor to purchase the property and begin renovations. The fast closing gave them a competitive edge and prevented them from losing the deal to another bidder.

Lender #2: RCN Capital

About the Lender: RCN Capital is a nationwide direct private lender. They have a reputation for providing flexible and reliable financing solutions to real estate investors. Unlike many lenders that focus on one or two loan types, RCN Capital offers a wide variety of loan programs to meet the needs of different investment strategies.

Why they stand out:

• Nationwide Reach: They lend in a vast number of states, giving investors more options.
• Lending Variety: Their products are designed for a wide range of investors, from beginners to seasoned professionals.
• No Upfront Fees: They have a no-upfront fee policy, so you can get a loan review without any initial costs.
• Interest-Only Payments: RCN Capital often offers interest-only payments on its loans. This helps to lower your monthly expenses during the renovation phase of a project.

Lending Programs: RCN Capital is an excellent choice for hard money mortgage lenders for fix and flip projects. They also provide financing for long-term rentals, new construction, and commercial properties. Their programs are structured to offer high leverage and can cover both the purchase and renovation costs of a project.

Real-life example/case study: An investor in a significant city was working on a “fix-and-hold” strategy for a small inn. The property was in a great location but needed significant renovations to increase its value and rental income. The investor had a solid business plan but was concerned about the high monthly payments associated with a traditional loan, given that the property was not generating any income. RCN Capital provided a hard money loan with an interest-only payment schedule, which significantly eased the financial burden during the renovation period. This allowed the investor to complete the project on time and within budget, and then refinance into a long-term loan.

Lender #3: Lima One Capital

About the Lender: Lima One Capital is a well-established private lender that prides itself on its efficient and straightforward lending process. They offer a wide range of loan products tailored to various investment strategies and have a reputation for transparency and exceptional customer service.

Why they stand out:

• Simplified Applying Process: They have a very streamlined “applying for hard money mortgage lenders” process. The application is straightforward, and the in-house team of experts helps to guide you through the process.
• In-house Underwriting: With an in-house underwriting team, Lima One Capital can offer fast approvals. This removes the need for external parties and helps to cut down on closing times.
• Competitive Terms: They offer competitive rates and terms, and are known for their ability to handle large funding amounts.
• Multiple Loan Products: They offer loans for a variety of projects, from single-family homes to large multifamily properties.

Lending Programs: Lima One Capital’s offerings include financing for new construction, rental properties, and residential rehab projects. Their hard money mortgage lenders for commercial property and multifamily loans are powerful for hospitality investors. They also offer a variety of bridge loans and portfolio loans for investors with multiple properties.

Real-life example/case study: An experienced hotel investor was looking to acquire a 50-room hotel that was in foreclosure. The investor had to act quickly to win the property from other bidders. The traditional financing process would have been too long. The investor used Lima One Capital’s online application. Due to their streamlined process and in-house team, the investor received loan approval in just a few days. This allowed them to close on the property and secure a valuable asset. The hotel was acquired with competitive terms and a flexible payment structure.

Lender #4: CoreVest

About the Lender: CoreVest is a leading lender for real estate investors. They are known for providing flexible financing for a variety of investment properties, including single-family rentals, multi-family properties, and commercial assets. They have a deep understanding of the real estate investment market and offer solutions for every type of investor.

Why they stand out:

• Bad Credit Friendly: CoreVest is an excellent option for individuals with a low credit score or a less-than-perfect financial history. They are one of the most accommodating hard money mortgage lenders for bad credit, focusing more on the property’s potential than the borrower’s past.
• No Credit Check Options: For some programs, lenders may even offer a hard money mortgage with a no-credit-check option, which is a significant advantage for specific borrowers.
• High Loan Amounts: They can provide financing for large-scale projects, with loan amounts up to $100 million.
• Flexible Terms: Their loans are designed to be flexible, offering various repayment options and terms to meet the borrower’s needs.

Lending Programs: CoreVest offers a wide array of programs, including hard money and bridge loans, as well as lines of credit for investors with multiple projects. They are powerful in the commercial real estate space. They can provide financing for hotels, apartment buildings, and other large commercial properties. Their expertise in handling complex deals makes them a top choice for serious investors.

Real-life example/case study: A real estate investor wanted to acquire a multi-unit building to convert it into a boutique hotel. The investor had a clear vision for the project and a strong equity position in the property. Still, a recent business setback had lowered their credit score. Traditional lenders would not even consider the loan. The investor reached out to CoreVest, which was willing to work with them based on the strength of the asset and the investor’s significant capital injection into the project. CoreVest provided the hard money loan, and the investor was able to move forward with the project, which is now on track to become a successful hotel.

Lender #5: Wilshire Quinn Capital

About the Lender: Wilshire Quinn Capital is a private money lender that provides fast and reliable financing. They are a direct lender, which means they can make quick decisions and fund loans in a matter of days. They have a strong focus on customer service and building long-term relationships with their clients.

Why they stand out:

• Direct Lender Advantage: As a direct lender, they control the entire process, which results in faster closings and more consistent service.
• Personalized Service: They take pride in their personal and hands-on approach. You will work with a dedicated team member who understands your specific needs and can help you navigate the process.
• Nationwide Lending: They offer financing for a diverse range of properties nationwide.
• Competitive Terms: They offer competitive rates and terms, and are known for their ability to handle complex and difficult-to-fund deals.

Lending Programs: Wilshire Quinn Capital offers a range of hard money loans for commercial and residential real estate. Their programs include financing for acquisitions, refinances, and construction projects. They are a good fit for hard money mortgage lenders for land loans as well, offering funding for land development projects.

Real-life example/case study: A developer in Florida found a perfect piece of land to build a new hotel. They needed a short-term loan to purchase the land and initiate the initial development plans while securing long-term construction financing. Traditional lenders were unwilling to provide a loan for undeveloped land. Wilshire Quinn Capital, with its expertise in hard money mortgage lenders for land loans, stepped in. They quickly assessed the project’s potential and provided a short-term, interest-only loan to the developer. This enabled the developer to secure the land and start the project without delay.

Hard Money Mortgage Lenders Requirements & Process

Unlike traditional lenders, hard money mortgage lenders’ requirements are primarily focused on the property, not the borrower. They care more about the asset’s value and your plan to repay the loan than your credit score. This can make them an ideal option for investors who need speed and flexibility.

Common Requirements

Here are the key things hard money lenders will look for:

• Property Information (LTV and ARV): The lender’s primary concern is the property’s value and associated risk. They will assess the current Loan-to-Value (LTV) and the After-Repair Value (ARV). The ARV is the estimated value of the property after all renovations are completed. Lenders often base their loan amount on a percentage of the ARV, which gives them a safety net in case of default.
• Exit Strategy: This is a critical requirement. The lender needs to know how you plan to pay back the loan. Your exit strategy could be to sell the property (fix and flip), to refinance into a conventional long-term loan (fix and hold), or to use funds from another investment.
• Borrower Experience: While some lenders work with beginners, many prefer to work with experienced investors. Your track record of successful projects can make you a more attractive borrower.
• Down Payment/Liquid Assets: You will need to have some of your own money invested in the deal. Hard money lenders typically require a significant down payment, often between 20% and 30% of the purchase price. They also want to see that you have cash reserves to cover the renovation costs and interest payments.

Applying for a Hard Money Mortgage

The process for applying for hard money mortgage lenders is much more straightforward and faster than applying for a traditional loan. Here’s a general breakdown of the steps:

1. Initial Inquiry: You contact the lender, either online or over the phone, and provide basic information about the property and your project.
2. Submission of Documents: You will be required to submit several key documents, including a property appraisal, your project’s business plan, and proof of your liquid assets.
3. Loan Approval and Terms: The lender will review your application promptly. If approved, they will provide you with the loan terms, including the interest rate, fees, and repayment schedule.
4. Closing: Once you agree to the terms, the closing can happen in as few as a few days. The speed of this process is a significant advantage. It allows investors to capitalize on time-sensitive deals that traditional banks would miss.

Pros and Cons of Hard Money Mortgage Lenders

Why HotelLoans.Net is Your Go-To Financial Partner

At HotelLoans.Net, we understand that hospitality real estate is a unique and specialized market. Our expertise is built on over 30 years of underwriting experience. We have a deep understanding of the intricacies of hotel financing, from acquisitions to complex renovations. We are not just a broker; we are a correspondent and table lender. This means we have direct relationships with some of the industry’s most active lenders, which translates to a faster and more efficient funding process for you.

Our extensive network is our greatest asset. We have curated a platform of over 1,000 private lenders and investors. This vast network gives you access to a diverse pool of capital, including the hard money lenders mentioned in this guide. This ensures that, regardless of your project’s size or complexity, we can find a solution that meets your needs.

Our services go beyond simply connecting you with a lender. We provide expert financial consulting to guide you through every step of the process. Our services include:

• Financial Consulting: We help you structure your deal to maximize its chances of success.
• Loan Sourcing: We assist with a variety of loan types, including FHA hospitality loans, CMBS, DSCR, and more.
• Exclusive Programs: We offer exclusive referral programs and direct lending opportunities.

We are committed to being your trusted financial partner, providing the advice and capital you need to succeed in the competitive world of hospitality real estate.

Conclusion

Hard money mortgage lenders offer a powerful solution for hospitality real estate investors who need speed and flexibility. While they come with higher costs, they provide a distinct advantage in time-sensitive situations, allowing you to secure deals that traditional lenders cannot. Understanding the pros, cons, and key players in this space is crucial for your success.

The right financing can make or break your investment. Don’t leave your next project to chance. Partner with an expert who understands the unique demands of the hospitality market and can connect you with the ideal lending solution.

Ready to talk about your next project? Contact us for a free consultation.

FAQs

1. Is a hard money loan the same as a bridge loan?

While often used interchangeably, hard money loans and bridge loans are not always the same thing. A hard money loan is a specific type of financing based on the value of a tangible asset (the “hard money”). A bridge loan, on the other hand, is a short-term loan that “bridges” a gap between two different financial transactions. While most hard money loans are also considered bridge loans, not all bridge loans are classified as hard money. For example, a bank can offer a bridge loan, but a hard money loan is almost always from a private lender.

2. Can you get a hard money loan for a hotel acquisition?

Yes, you can. Hard money loans are a common and effective tool for hospitality property acquisition, especially when the property is distressed or a deal needs to close quickly. Traditional financing for a hotel can take months due to extensive underwriting and documentation requirements. A hard money loan allows an investor to secure the property soon, stabilize its operations, and then refinance with a more traditional, long-term loan once the hotel is performing better.

3. What is a mezzanine loan, and how does it compare to a hard money loan?

A mezzanine loan is a type of financing that falls between senior debt (such as a traditional mortgage) and equity. It’s often used to fill a funding gap when a senior lender won’t finance the entire project. While both mezzanine and hard money loans are riskier and have higher interest rates than senior debt, they differ in their security. A hard money loan is secured by a first or second mortgage on the property itself. A mezzanine loan is typically unsecured and secured by the borrower’s ownership interest in the business entity that owns the property.

4. What are some of the typical closing costs for a hard money loan?

In addition to high interest rates, hard money loans have various closing costs and fees. These can include an origination fee, also known as “points,” which is a percentage of the loan amount paid to the lender upfront. You may also encounter additional fees, including underwriting fees, appraisal fees, document preparation fees, and legal fees. These costs can vary, so it’s essential to obtain a comprehensive breakdown from your lender before signing.

5. How does a hard money lender evaluate a property’s value?

Hard money lenders focus on a property’s current value and future potential. They will order a professional appraisal and may also conduct their own on-site inspections. They heavily rely on the After-Repair Value (ARV) of the property, which is its estimated value once all planned renovations are complete. The lender will then lend a percentage of this ARV, ensuring they have a financial buffer to protect their investment.