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What to Look For and Avoid with Hard Money Loans

Hard Money Loans Los Angeles

After spending months researching the area and finally settling on the perfect investment, you have all your loan documents in order, and you are ready to find the optimal hard money lender. But who can you trust with your project? Here are a few things that all borrowers should focus on when choosing the best lenders:

High Interest

Always look out for unusually high interest rates. This includes anything higher than 15%, which is ridiculously high in any market. Because hard money lenders use the proposed value of distressed properties after rehabilitation, most of the time they settle on 2-4 origination points and around 12% interest.

Default Rates

Hard money loans are not funded by traditional banks. Hence, there is a lot less paperwork and verification involved. While this can be great for borrowers, the lack of regulation can be a way in which unscrupulous lenders can take advantage of less informed customers. Thus it is imperative to do your due diligence and work with a reputable and experienced hard money lender in Los Angeles.

The best way to predict future predatory tactics is to take a look at how many hard money loans the lender has funded and how many of those have been defaulted on. High default rates may indicate the use of amoral underwriting principles.


Time can be of the essence when you are making valuable real estate deals. Therefore, you will require a lender that can quickly complete draw requests and be available via phone or email to answer any important questions during business hours. You never want to lose out on a golden opportunity because your financing has not come through fast enough. The market will definitely move on rather than wait for you.

Remember, one of the best advantages of working with hard money lender in Los Angeles are quick and easy closings. Losing out on a deal due to your lender dragging its feet defeats the whole purpose.

Keep it Local

Local lenders know the ins and outs of your nearby real estate market. They not only have more personal experience working in the community but underwrite assets most accurately in accordance with the local market’s current activity. Not only is this beneficial to you as an investor, it also greatly assists the lender. Lenders with greater underwriting accuracy tend to field far less defaults on loans.

Not to mention, local lenders are usually much more invested in your personal success. They want to see great things happening in their neighborhood just as much as you do!

To Learn More About How Hard Money Lenders in Los Angeles Can Help Fund Your Next Project Contact PB Financial Group Today

If you are interested in purchasing real estate or need funding for your next project, you need to work with a reputable and respected hard money lender in Los Angeles. PB Financial Group is a premier direct hard money, private money, and bridge lender, who has been providing quick funding since 2006 and have funded over 2700 hard money/private money loans. Our objective is to work to satisfy your financing needs on important real estate projects throughout California in an efficient and effective manner.

To learn more about how to successfully finance your next real estate venture, please contact PB Financial Group, at 877.700.3707 to schedule a consultation or visit to learn more.

PB Financial NMLS #357614/DRE #01522495

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