How to Get a Hard Money Loan in San Francisco
San Francisco real estate can move quickly, and traditional financing may not always match the timeline or flexibility real estate investors need. If you’re purchasing, refinancing, renovating, or accessing equity in an investment property, a hard money loan in San Francisco may provide an alternative to conventional bank financing.
Hard money loans are generally short-term, real estate-secured loans that place greater emphasis on the value and equity of the property than traditional lending criteria. At Wilshire Quinn Capital, we provide hard money and bridge loans for commercial and non-owner-occupied residential properties in California and nationwide. If you’re considering this type of financing, here’s how to get a hard money loan in San Francisco and what to expect during the process.
What Is a Hard Money Loan?
A hard money loan is financing secured primarily by real estate. Instead of relying primarily on factors such as income documentation, debt-to-income ratios, and credit scores, hard money lenders typically place significant emphasis on the underlying property’s value and available equity. This asset-based approach can make hard money useful for investors who need to:
- Purchase investment property quickly
- Refinance an existing real estate loan
- Access equity through a cash-out refinance
- Renovate or reposition an investment property
- Acquire property that may not qualify for conventional financing
- Complete a time-sensitive real estate transaction
Learn more about how hard money loans work.
How to Get a Hard Money Loan in San Francisco
Hard money lenders have different underwriting guidelines, but the process generally starts with the property and your proposed transaction. Here are the key steps.
1. Find a San Francisco Hard Money Lender
Start by identifying lenders that understand the San Francisco and Bay Area real estate markets. When comparing lenders, consider more than just the advertised interest rate. Review factors such as:
- Loan-to-value limits
- Minimum and maximum loan amounts
- Property types financed
- Loan terms
- Origination fees
- Closing timelines
- Geographic coverage
- Whether the company is a direct lender or broker
Working with a direct lender can be beneficial when timing is important because the company making the lending decision controls its own capital. Wilshire Quinn Capital is a direct portfolio lender with a San Francisco office serving real estate investors throughout Northern California and the Bay Area.
Choosing the right hard money lender in San Francisco involves evaluating loan terms, fees, property eligibility, and funding timelines. Learn how Wilshire Quinn Capital provides hard money loans for your business.
2. Determine Your Property’s Value and Equity
Property value is one of the most important factors when applying for a hard money loan.
Hard money lenders frequently use loan-to-value (LTV) to determine how much they’re willing to lend. LTV compares your loan amount to the property’s value. For example, if an investment property is worth $2 million and the requested loan is $1 million:
$1,000,000 ÷ $2,000,000 = 50% LTV
Lower LTV generally means the borrower has more equity in the property, which can reduce the lender’s risk. Wilshire Quinn’s current lending parameters provide financing of up to 60% LTV, subject to underwriting and the specifics of each transaction.
3. Identify the Purpose of Your San Francisco Hard Money Loan
Before applying, clearly define why you need financing. Hard money loans can potentially be used for several investment-related purposes.
Investment Property Purchases
A hard money loan may allow an investor to move quickly when purchasing a San Francisco or Bay Area property, particularly when conventional financing would take too long.
Refinancing
Investors can potentially use hard money to refinance existing real estate debt when a traditional refinance isn’t immediately available.
Cash-Out Refinancing
Property owners with sufficient equity may be able to access a portion of that equity for business or investment purposes.
Property Rehabilitation
Hard money can be particularly useful when a property requires improvements before it qualifies for conventional financing.
Bridge Financing
A bridge loan can provide temporary financing while an investor works toward a longer-term solution, property sale, or refinance.
4. Make Sure the Property Qualifies
Hard money lenders can finance a broader range of properties than many conventional lending programs, but every lender establishes its own guidelines. Wilshire Quinn considers financing for property types including:
- Non-owner-occupied single-family properties
- Condominiums
- Multifamily properties
- Apartment buildings
- Office properties
- Retail centers
- Industrial properties
- Warehouses
- Mixed-use properties
- Hotels and motels
- Healthcare properties
- Special-purpose properties
- Parking garages and lots
This flexibility can be particularly useful in the Bay Area, where investment opportunities range from residential rental properties to multifamily, mixed-use, retail, office, and other commercial assets. Review Wilshire Quinn’s current lending options for additional information.
5. Prepare a Clear Exit Strategy
One of the most important parts of obtaining a hard money loan is explaining how you intend to repay it. Because hard money is generally short-term financing, lenders want to see a realistic exit strategy. Common strategies include:
- Selling the property: An investor renovates or repositions a property and sells it.
- Conventional refinancing: An investor improves or stabilizes the property before refinancing into longer-term financing.
- Selling another asset: Proceeds from another real estate transaction may be used to repay the loan.
- Long-term financing: A bridge loan can provide temporary capital while permanent financing is arranged.
Your exit strategy should be realistic for the property’s condition, business plan, loan term, and current real estate environment.
6. Gather Information About the Property
Hard money applications can often be more streamlined than traditional bank financing, but borrowers should still be prepared to provide detailed information. Your lender may request information such as:
- Property address
- Property type
- Purchase price
- Estimated market value
- Current loan balance
- Requested loan amount
- Intended use of funds
- Renovation budget
- Borrower information
- Proposed exit strategy
Having this information ready can help expedite the lender’s initial evaluation.
7. Submit Your Hard Money Loan Application
Once you’ve selected a lender and gathered the necessary property information, the next step is submitting your loan request. Because the property is a major component of underwriting, an experienced hard money lender can often provide an initial indication relatively quickly.
San Francisco investors can submit a loan request to Wilshire Quinn Capital for consideration.
How Fast Can You Get a Hard Money Loan in San Francisco?
One of the biggest reasons investors use hard money is speed. Traditional commercial and investment-property loans can require extensive documentation and underwriting. Hard money lenders may be able to move considerably faster. Wilshire Quinn currently provides pre-approval in approximately 24 hours and typically funds qualifying transactions in approximately five to seven days.
Actual funding times vary depending on factors such as the property, valuation, title, documentation, transaction complexity, and underwriting. In a competitive market such as San Francisco, a faster financing process can be valuable when an investment opportunity has a short closing timeline.
What Credit Score Do You Need for a San Francisco Hard Money Loan?
There isn’t one universal credit score requirement for every hard money lender. Unlike conventional financing, hard money underwriting tends to place greater emphasis on the property’s value and available equity.
Creditworthiness may still be considered as part of the overall transaction, but a lower credit score doesn’t necessarily eliminate the possibility of obtaining financing. The lender will typically consider the entire scenario, including:
- Property value
- Available equity
- LTV
- Loan amount
- Property type
- Borrower profile
- Loan purpose
- Exit strategy
This can provide additional flexibility for real estate investors who don’t fit traditional bank lending guidelines.
While credit score requirements vary among hard money lenders, approval often depends on more than credit alone. Learn more how to qualify for a hard money loan and what lenders consider during the approval process.
How Much Down Payment Do You Need for a Hard Money Loan?
There is no single down payment requirement that applies to every hard money loan. Instead, lenders typically establish an acceptable maximum LTV. For a property purchase, the difference between the lender’s maximum loan amount and the purchase price generally needs to come from the borrower or another acceptable source.
Refinancing works differently because the borrower may already have significant equity in the property. The required equity will ultimately depend on the lender, property, transaction, and underwriting.
How Much Does a Hard Money Loan Cost in San Francisco?
Hard money financing generally costs more than conventional bank financing. Borrowers should evaluate the complete cost of the loan rather than focusing only on the interest rate. Costs can include:
- Interest
- Origination points
- Valuation or appraisal expenses
- Title and escrow costs
- Legal or documentation expenses
- Other applicable closing costs
Wilshire Quinn’s current bridge lending parameters list interest rates generally ranging from 9% to 12% and origination fees generally ranging from 1 to 5 points. Actual pricing depends on factors such as the property, LTV, loan amount, borrower, location, loan term, and overall risk profile. Because rates and lending programs can change, borrowers should request current pricing for their specific San Francisco property.
Understanding the full cost of a hard money loan is essential when evaluating financing options for your San Francisco investment property. Learn how to find the right real estate hard money lender for your investment needs.
Benefits of Hard Money Loans for San Francisco Real Estate Investors
San Francisco is one of the country’s most valuable and complex real estate markets. Investors may encounter situations where traditional lending simply doesn’t provide the necessary speed or flexibility. A hard money loan can potentially provide:
- Faster decisions: Asset-based underwriting can streamline the approval process.
- Faster closings: Qualified transactions may close significantly faster than traditional bank loans.
- Flexible underwriting: Property value and equity play a major role in the lending decision.
- Property flexibility: Financing may be available for residential investment, multifamily, commercial, mixed-use, and other property types.
- Bridge financing: Investors can secure temporary capital while preparing a property for sale or permanent financing.
These benefits should always be weighed against the higher costs typically associated with hard money financing.
Frequently Asked Questions About San Francisco Hard Money Loans
Can I get a hard money loan in San Francisco?
Yes. Hard money financing may be available for qualifying commercial and non-owner-occupied residential investment properties in San Francisco and throughout the Bay Area.
Are hard money loans available for San Francisco investment properties?
Yes. Investors can potentially use hard money loans for purchases, refinances, cash-out transactions, rehabilitation projects, and other qualifying investment-property needs.
Can I get a hard money loan with bad credit?
Potentially. Hard money lenders generally focus more heavily on property value and equity than conventional lenders. However, creditworthiness may still be considered as part of the overall underwriting process.
How quickly can a hard money loan close?
Closing times vary by lender and transaction. Wilshire Quinn typically funds qualifying transactions in approximately five to seven days after the necessary requirements are satisfied.
Can hard money be used for commercial property in San Francisco?
Yes. Depending on the lender’s guidelines, hard money can potentially finance multifamily, office, retail, industrial, mixed-use, hospitality, and other commercial real estate.
Are hard money loans only for fix-and-flip properties?
No. While hard money is commonly associated with fix-and-flip investing, it can also be used for investment-property purchases, commercial properties, refinances, cash-out transactions, bridge financing, and other real estate investment scenarios.
Work With a San Francisco Hard Money Lender
When a real estate opportunity requires speed and flexible financing, a hard money loan may provide an alternative to traditional bank lending.
Wilshire Quinn Capital is a direct portfolio lender providing hard money and bridge loans for commercial and non-owner-occupied residential properties. With a local San Francisco office, we work with real estate investors throughout the Bay Area, California, and nationwide.
Whether you’re purchasing an investment property, refinancing an existing loan, accessing equity, or need short-term bridge financing, our team can review your scenario and determine whether it fits our lending guidelines. Apply for a hard money loan or contact Wilshire Quinn Capital to discuss your San Francisco real estate financing needs.
Loan programs, rates, fees, terms, LTV limits, and funding timelines are subject to change and underwriting approval. This article is provided for general informational purposes and does not constitute an offer to lend.