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JD MORTGAGE® connects you with lenders who want to help you get the funds you need. We find the lenders that offer terms specially tailored to your goals—for fix and flip projects, bridge loans, rental properties, and commercial real estate development.
Offered exclusively through Biglaw Investor, we make it incredibly simple to find the best loan for your hard money financing needs.
Utah is a Mountain State in the western portion of the country. It’s home to over 3 million people, though as large as it is, it is far less densely populated than other areas. The area is stunning with its mountains, deserts, and densely forested areas. There are two primary areas of urban development here. The first is the Wasatch Front, where Salt Lake City is located. In addition to this, Washington County is also a more densely populated area. Overall, Utah is noted for having extensive health care, education, and infrastructure systems in place. It also has a strong tourism, mining, and energy economy. Quite diverse and full of opportunity, there are many reasons to live in Utah.
For those looking for affordability, home values can be very competitive. There are some areas where the home values are very high and others where the cost of living is much longer. Utah property owners often own larger lots than most typical property owners. However, overall, it can be costly to buy a home here. The median sale price for a home in Utah is currently $535,050, according to the Utah Realtors Association, and that’s due to a significant amount of demand, lower inventory levels, and a higher quality of home. The area has seen home prices increase year over year for some time, and that may continue allowing buyers to build equity if it does.
When it comes to rental property, the high value of homes here has led to a sizable number of people renting. The U.S. Census Bureau notes that 70.6 percent of people own their homes here, and 29.4 percent rent them. Of those, 4.7 percent of rental properties are vacant. That could indicate to some buyers that there is room for investors who wish to purchase, renovate, and list homes for sale or create income properties.
Hard money loans have become an increasingly popular option for real estate investors and developers in Utah. As a long-time Utah resident and real estate investor myself, I want to provide an in-depth look at everything you need to know about hard money lending in the state.
What Are Hard Money Loans?
Hard money loans are a type of short-term financing secured by real estate The loans are provided by private investors rather than banks or mortgage lenders Hard money loans are ideal for real estate projects that may not qualify for traditional bank financing,
With a hard money loan, the property itself serves as collateral for the loan. This allows hard money lenders to offer flexible lending criteria compared to conventional loans. Hard money loans are based more on the value of the underlying asset rather than the borrower’s credit score or income.
Some common uses for hard money loans include
- Fix-and-flip projects
- Rehabbing distressed properties
- Purchasing and redeveloping commercial buildings
- Providing bridge financing
- Constructing new buildings
Hard money loans fill an important niche, providing access to capital for real estate investors taking on riskier projects or who need funding quickly.
Hard Money Lending in Utah
The real estate market in Utah has boomed in recent years. As demand rises, so too does the need for alternative financing options like hard money loans. Utah’s major metro areas like Salt Lake City, Provo, and St. George have seen rapid growth and many investors are utilizing hard money loans to capitalize on fix-and-flips and other opportunities.
While hard money lending happens across the United States, some states regulate it more than others. Utah takes a relatively hands-off approach compared to other states, making it friendly to borrowers and lenders.
According to industry estimates, there are dozens of active private hard money lending companies currently operating in Utah. They range from small operations with just a few million dollars to lend, up to larger companies like Primary Source Lending with over $100 million in available capital.
Benefits of Hard Money Loans
There are many reasons why real estate investors and developers may prefer hard money loans over conventional financing:
Speed
The ability to move quickly is one of the main advantages of hard money loans. While conventional mortgages can take 30-45 days to close, a hard money loan can provide funding in as little as 1 week. The streamlined underwriting allows deals to move rapidly.
Flexibility
Hard money lenders focus more on the real estate asset itself rather than the borrower’s financial profile. This provides greater flexibility for those with lower credit scores or income. Hard money loans can also be used for a wider array of property types.
Higher Loan-to-Value (LTV) Ratios
Hard money lenders are able to offer higher loan-to-value ratios than conventional lenders, often between 60-80% LTV. This allows the borrower to get more leverage on their investment.
No Prepayment Penalties
Hard money loans typically don’t carry prepayment penalties, allowing borrowers to pay off the loan early or refinance into long-term financing once rehab work is complete.
Interest-Only Payments
Hard money loans offer interest-only payments rather than fully amortized payments. This can improve cash flow during the loan term.
Hard Money Loan Rates & Terms
Hard money loans are considered a high-risk product for lenders, which is reflected in the rates and terms:
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Interest rates – Typically 11-15%, rates are based on the project’s perceived risk, borrower’s experience, LTV, and additional factors.
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Loan terms – Usually 6 months to 3 years. Shorter terms for bridge loans, longer for large projects.
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Loan amounts – Can range anywhere from $50,000 into the millions. Hard money loans often fund 70-80% of purchase plus rehab costs.
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Points – Lenders charge origination fees or “points” of 2-5% of the loan amount. Points are charged instead of interest.
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Prepayment penalties – Rare, allowing borrowers flexibility to pay off early or refinance.
While costlier than conventional loans, for the right project hard money loans provide fast access to capital that would otherwise be difficult to obtain.
Finding a Hard Money Lender in Utah
The key to success with hard money loans is finding an experienced lender who understands your business and needs. Here are some tips for choosing a hard money lender:
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Look for long track records and specialization in hard money lending. This demonstrates expertise.
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Ask about their lending criteria, rates, and terms to assess if they are a good fit.
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Inquire about their typical lending geography, property types, and loan sizes. Make sure they are comfortable with your planned activities.
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Look for personalized customer service and responsiveness. This helps move deals swiftly.
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Research their reputation and ask for references from past clients.
Highly regarded hard money lenders in Utah I recommend contacting include Primary Source Lending, OpenCashAdvance, American Cash Funding, and Capital Solutions. All have proven track records funding millions in real estate loans across Utah.
The Hard Money Loan Process
Now let’s walk through the typical hard money loan process from start to finish:
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Initial consultation – Borrower contacts lender to explain project details and get initial loan terms.
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Underwriting – If project fits lending criteria, lender analyzes property value, budget, exit strategy, borrower’s experience, and other factors to mitigate risk.
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Letter of intent – Non-binding letter outlining proposed loan terms prior to underwriting completion. Allows borrower to pursue opportunities quickly.
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Loan submission – Borrower provides full due diligence package including purchase agreement, bids, etc. to complete underwriting.
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Loan approval – If meets guidelines, lender issues formal term sheet and loan commitment letter.
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Closing – Finalizing documentation, securing collateral, collecting points and fees. Funds disbursed.
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Draw schedule – For construction loans, funds issued in installments based on completion of work.
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Loan servicing – Ongoing collection of payments over the loan term. Interest-only payments typical.
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Payoff – At maturity, borrower pays loan balance or refinances into permanent financing.
A typical hard money loan can be approved and funded in 1-2 weeks. Lenders expedite the process as much as possible.
Common Hard Money Loan Uses
Utah’s hot real estate market and increasing property values provide ample hard money lending opportunities including:
Fix-and-Flip Loans
Hard money is ideal to finance property renovations to resell for a profit. Fix-and-flip loans provide acquisition and rehab costs to purchase, update, and quickly sell a property.
Bridge Loans
Bridge loans provide short-term financing to qualified borrowers while waiting for permanent financing or another event. Often used for new construction.
Rehab Loans
Funds to remodel and repair existing investment properties to increase rents and value.
Commercial Loans
Purchase or remodel retail, office, industrial, or special-purpose properties.
New Construction Loans
Build new houses or developments. Land acquisition, infrastructure, and construction costs provided over the building period.
Land Loans
Finance land acquisition, entitlements, and pre-development costs. Later can become construction financing.
Hard money loans allow investors to take advantage of opportunities by providing timely financing for projects that don’t fit conventional lending criteria.
Wrapping Up
While costlier than conventional financing, the flexibility, leverage, and speed of hard money loans make them worthwhile for experienced investors on the right projects. I always recommend working with reputable, experienced hard money lenders that understand your business goals. This helps ensure a smooth lending process.
Easy Street Capital
East Street Capital is based in Austin, Texas but lends nationwide except in North and South Dakota. Founded by Stephen Hagerman in 2016, Easy Street Capital has over six years of experience in the real estate investing world.
We reached out to Easy Street Capital to learn more about their hard money loans and this is what we found:
- Interest rates range from 6.9% – 10.9%
- Points range from 2-3
- There is a $1495 document fee
- No minimum credit score required
- Down payments of at least 10% required
- Renovation financing ok
- Fix and Flip loans do not typically have prepayment penalties
When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.
LendSimpli is a hard money lender based in Tampa, Florida. They can lend nationally in most states but may not be able to lend if the property is in a rural area. Founded by Brenden Crampton and Matthew Davies in 2018, they have nearly four years of experience in the private lending real estate investing market.
We reached out to LendSimpli to get more details about their bridge loan product and this is what we found:
- Loan amounts up to $5 million for 1-4 unit properties
- Loan amounts up to $20 million for 5+ unit properties
- Single family (1-4 units)
- Multifamily (5-20 units)
- No owner-occupied properties
- Loan terms 12-24 months
- Interest-only payments with rates starting at 8.50%
- Max LTC is 90% of project costs
- Minimum credit score is 660
- Prefer that you have at least two transactions in the past three years
When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.
6 Top Utah hard money lenders
Some lenders only offer hard money loans to experienced investors, while other programs can lend to those that are pursuing their first real estate investment.
Exit Strategy for Hard Money Loans
FAQ
What credit score is needed for a hard money loan?
How does a hard money loan work?
Is hard money lending safe?
How do I pay off a hard money loan?
What is a Utah hard money loan?
Utah hard money loans can be significantly different than the traditional loan from a bank or a credit union to buy a home. First, they are typically used only for investment property, including fix and flip, rental income properties, and commercial real estate development. That’s much different than loans for residential purchases.
Who is private money Utah?
Private Money Utah offers fast funding, we are a direct lending source, and get your deal done. GET A LOAN NOW! Since the peak in the first quarter of 2022, the number of home flips nationally has been on a steady… Continue Reading Private Money Loan vs. Traditional Loan: Which is Right for You?
How long do hard money loans last in Utah?
They tend to have much shorter terms, ranging from 1 to 5 years instead of the 15 to 30 years that are typical with a traditional conventional loan. In addition to this, Utah hard money lenders often work closely with borrowers to ensure they get the terms and conditions best suited for their needs.
What is a hard money loan?
A hard money loan is an asset-based loan provided for projects like fix and flip homes, bridge loans for new construction, and rental income property financing. Hard money lenders may set their own rules and terms for these loans, often providing better access than typical banks.
Should you get a short term loan in Utah?
For those who need short term loans of under 5 years, this type of financing option may prove to be the ideal choice. Utah is a Mountain State in the western portion of the country. It’s home to over 3 million people, though as large as it is, it is far less densely populated than other areas.
Are hard money loans a good option?
Hard money lenders may set their own rules and terms for these loans, often providing better access than typical banks. For those who need short term loans of under 5 years, this type of financing option may prove to be the ideal choice.