Hard Money Loan Questions, Answered

A lender funds part of the purchase of an investment property at closing, holds renovation funds that are released in draws as work is completed, charges interest-only payments over a short term, and is repaid when you sell or refinance. The full walkthrough is in How does a hard money loan work?

Banks qualify you mainly on income and credit and prefer move-in-ready property. Hard money lenders focus on the property, the plan and the exit, can fund properties that need work, and generally close faster, at a higher cost for a shorter term.

Wisdom Capital is a direct lender focused on financing real estate investors and investment projects in New York, New Jersey and Connecticut. Youssef Bauer is an Account Executive there.

No. It is also used for acquisition + rehab projects you plan to hold, construction, and short-term bridge situations.

Wisdom Capital lends up to 90% of the purchase price and up to 100% of hard (renovation) costs on 1–4 unit fix-and-flip projects, with loans from $100,000 to $3,000,000. The loan is also capped at 70% of after-repair value (ARV). For example, a $400,000 purchase with a $100,000 renovation and a $700,000 ARV could be financed up to $460,000. Run your deal in the loan calculator.

After-repair value is the expected market value once renovations are complete, based on recent sales of comparable renovated properties. See How to calculate ARV or use the ARV calculator.

Loan-to-cost is the loan amount divided by the total project cost, usually the purchase price plus the renovation budget. See What is LTC?

Points are an upfront fee expressed as a percentage of the loan amount. One point on a $400,000 loan is $4,000, usually paid at closing.

Yes. Without prior projects, lenders weigh the deal's margin, your cash reserves and your contractor more heavily. See first-time investor financing and what lenders weigh on a first deal.

Enough for the unfinanced part of the purchase, closing costs and points, the first phase of renovation before a draw, monthly interest, holding costs and a contingency. The calculator adds these up.

Wisdom Capital is built for time-sensitive deals: a $495 desktop appraisal with no property access needed, no on-site inspections, and same-day draw wires. The main variables are title, the closing attorney and how complete your documents are. See the checklist.

You complete a phase of work, request a draw, the work is verified, and funds for that phase are released. Draws reimburse completed work, so plan cash to start each phase.

To start: the address, property type, purchase price, renovation budget, estimated ARV, requested loan amount, target closing date and your experience. Submit a deal here. The full document list is in loan requirements.

Investment property in New York (New York City, Long Island and Westchester), New Jersey statewide and Connecticut statewide. See the New York, New Jersey and Connecticut guides.

State and area pages describe where properties are financed, not office locations. Deals are handled directly with Youssef by phone and email.

Yes. Brokers, agents, wholesalers, attorneys and contractors who work with investors can send deals directly to Youssef.

Yes. Use the deal form and note in the comments that you are submitting for a client, with their permission.