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Family Office Lender. No 3rd-party appraisal (typically). Soft Money Terms in 1st or 2nd Lien Position.
Our Current Maximum Fixed Interest Rate is 8.5% for 4-year term, 8.25% for 2 years, and 7.95% for 1 year
About Private Money Lending in California
California has lots of “private money” and lots of professional private money lending companies that offer short-term loans secured by real estate. It’s mainly for investment properties, but California has some unique laws that enable private lenders to fund loans secured by a borrower’s primary residence. Here are the typical private money lending guidelines for most lenders in California:
- Loan Amounts: $50,000 to $20,000,000
- Interest Rates: 7.99% to 13%
- Most California private lenders charge 9%-10% interest as of December 2022
- Origination Fee: 1 to 3 points
- Maximum LTV for Senior (1st) Lien: Up to 70%
- Maximum CLTV for Junior Liens: Up to 65%
- Lien Position: 1st, 2nd or 3rd
- 2nd mortgages are common in California
- Loan Term: 1 month to 5 years
- Most private money lenders max out at 24 months
- Most lenders have a 3-month minimum term (interest guarantee)
- Payment Type: Interest-only
- Few private lenders in California amortize all of their loans
Funded Private Money Loans in San Bernardino County
Private Money Loan for Single-Family Residence in Rancho Cucamonga, California
Karpe Real Estate Center, a direct private lender for Central California real estate, funded an $820,000 1st lien position private money loan for the acquisition of a single-family home in Rancho Cucamonga, California. We funded 68% of the $1,200,000 purchase price, while the Borrower contributed 32% cash at closing. They were purchasing the property for a family member to live in on a long-term lease. They owed back taxes and solar panel lease payments on the property which were paid off by our loan. The Borrower went with a private money loan for speed and to clean up the tax and solar situation. They plan to continue leasing the property and will eventually refinance with a conventional loan as an exit strategy. The subject property was in excellent condition and tenant-occupied at closing. It is approximately 3,273 square feet, set in a 21,750-square-foot lot. The Borrower had average credit. The interest rate was 10.50%. The loan term was set at 36 months. This private money loan was funded in June 2023.