Bellingham Hard Money Lenders

2 Local Washington Hard Money Lenders

Here are the hard money lenders on our platform that are “local” lenders, based in Washington State.

1. Rain City Capital
   Based in Kirland and Established in 2009, Rain City Capital is a direct lender that offers hard money loans throughout Washington – Seattle, Tacoma, Spokane, Kennewick, Richland, Yakima, Vancouver, etc. They offer various types of loans: bridge, fix-and-flip, fix-to-rent, cash-flowing rentals, ground-up construction, and foreclosure auction purchases. According to Forecasa™, in the 4th quarter of 2024, they were the #2 top lender in the state in terms of loan volume.
2. Certain Lending
   Based in Downtown Seattle, Certain Lending offers a variety of hard money lending options to Washington real estate investors – bridge, fix & flip, rehab-to-rent, ground-up construction, and DSCR long-term rental loans. They consider single family homes, condos, and small multifamily properties up to 10 units. According to Forecasa™, in the 4th quarter of 2024, they were the #9 top lender in the state in terms of loan volume.

Washington Hard Money Insights from a Local Lender

The real estate market in Washington State remains strong for investors. Despite the challenge of low inventory, investors can still capitalize on opportunities when they arise. Lesa Say from Rain City Capital, a local lender in Washington State, emphasizes that understanding local demands and managing numbers wisely are key to finding success. For instance, Seattle is a more favorable area for condo purchases compared to regions where land and barn-like properties are in higher demand. Lesa advises, “do your research, make sure you’re talking to a local agent, talk to an investor, and know what that specific area needs and what is selling. Because you can find deals anywhere. Washington’s a good state to lend in and do deals in.”

According to Rain City Capital, the multi-unit strategy is currently one of the hottest trends among investors in Washington. They’re seeking properties with add value potential, particularly through the inclusion of ADUs (Accessory Dwelling Units) and DADUs (Detached Accessory Dwelling Units). This strategy allows investors to maximize their profits by converting the properties into condominiums. “So instead of just having one asset, one house, and selling it, they’re now having three, and when you can add that third unit, that’s when you’re really making that money,” Lesa explains.

The ADU and DADU process typically takes longer than a standard property extension. Investors looking to enter this market need to understand the process thoroughly before diving in. Lesa advises, “it is definitely a longer deal; it’s not an in and out where you’re out in like three months. You have to make sure you know what you’re doing. So I would definitely suggest if that’s a path someone wants to go, go have coffee or go talk to a mentor on that because there are definitely elements that you need to know about.”

Investors are also targeting desirable single-family properties sought after by first-time home buyers. Lesa explains that many current homeowners are staying put due to low interest rates, resulting in a slowdown in inventory. However, investors are not discouraged by this; instead, they view it as an opportunity to profit even more from the properties they do find. Lesa says, “an investor that’s able to find a deal, maybe off-market or where ever they’re finding their deals, they’re putting it on the market and then selling really quickly with multiple offers.”

Popular Markets for Investors to Consider in Washington State

According to Rain City Capital, the most popular markets in Washington are Snohomish, King, Pierce, Kitsap, and the West Side. Kitsap typically lags a couple of years behind the standard trends seen in Seattle. Lesa says, this makes it an ideal location to pivot and capitalize on emerging trends. Investors can often purchase properties at lower price points in Kitsap while still achieving good margins. Additionally, holding onto these properties and adding value can yield significant returns as the market catches up.

The Seattle area in general is also a great market, especially for property adds. Lesa says Seattle is very welcoming to the ADU and DADU process.

The East Side (east of the Puget Sound) is popular in the rental market due to its lower rent prices. Lesa suggests that investing in condos and converting hotels and apartments can be highly profitable in this area. “Properties are cheaper over there. People want to still buy in Washington, but maybe it’s not as expensive. So they’re going over on that side. So we see a lot of growth in that area too”, she says.

There are also potential opportunities in the rural areas of Washington State, especially in Pierce County or King. For investors wanting to seek opportunities in these areas, Lesa suggests speaking with a local lender who knows and understands the rural zoning areas.

The challenge of the Rental Market

The rental market in Washington continues to be a challenge for investors. It is a bit of a struggle to make the numbers work in Washington as they do in other states. According to Lesa, the state’s tenant-friendly laws allow tenants to stay longer and make evictions more difficult, posing additional challenges for landlords. As a result, many landlords are moving out of Washington to own rental properties elsewhere. This trend is unfortunate because these individual landlords are often more attentive to tenants’ needs compared to large multi-million dollar companies with hundreds of rentals. Individual landlords are more likely to respond promptly and provide personalized care, but they are increasingly being pushed out due to the difficulties of managing tenants in Washington.

Despite the higher property prices, rents are also higher, so this isn’t necessarily the main issue. The key concern is how landlords are treated in Washington compared to other states. It’s the question of are we encouraging landlords to provide safe and comfortable rental environments, or are we making it too hard for them to stay in the market? This is a significant drawback to owning rental properties in Washington and is a real downside for investors considering the state’s rental market.

Competition with Local and National Lenders

There is significant competition among local and national lenders in Washington State, however, investors genuinely understand the value of building strong relationships. Lesa states that while Rain City Capital faces competition from national lenders and several prominent hard money lenders, they are proud to be one of the key players in the market. Often, investors will only need to experience a national lender once to realize the drawbacks—such as issues with draw requests and the impersonal treatment that can come from being just another number. “In my personal opinion, there is always competition, but I make sure I treat my borrowers with respect and get them the best they can get, and I will fight for any deal that I can for them and have a relationship with them, and that tends to not be a problem because you might not get that with a national big lender,” Lesa says.
Lesa explains that your lender can truly make or break your investment. It’s essential to understand all the details, such as whether you need to start paying monthly on your draws before they’re fully disbursed or if payment begins only upon disbursement. These small details can significantly impact your bottom line.

You should also ask if your loan will be sold to another entity, who will handle your draws, and who your point of contact will be. “I would say really ask questions because you should feel very comfortable with who you’re speaking with and knowing that they got your back and they’re going to take care of you because it is a short loan,” she says.
Lesa says that if you’re thinking about investing, you shouldn’t hesitate to start. “You can be around everybody that is doing it, but until you actually just jump and do one, then you’re just on the sidelines, and you don’t want to be in the sidelines five years from now when the interest rate is different and the value is different and you’re wishing you would have, it’s calculated risk, she says.

Lesa advises, for hard money loans, a minimum term of 12 months. Anything shorter can be risky, as unexpected issues can arise. And as long as the rent coverage ratio is good and the numbers make sense, it will probably be a good investment. Always consider taxes, insurance, and mortgage payments, and ensure your rent provides a good debt-to-service ratio to make a profit. Unexpected expenses like broken siding, windows, or AC units can arise, so it’s crucial to ensure you’re making money to cover such eventualities.

Established in 2009, Rain City Capital is a direct lender that offers private money loans throughout Washington – Seattle, Tacoma, Spokane, Kennewick, Richland, Yakima, Vancouver, etc. They offer bridge, fix-and-flip, fix-to-rent, cash-flowing rentals, ground-up construction, and foreclosure auction purchases loans. Set apart by their seasoned team and creative loan programs, they partner closely with each borrower to ensure success.

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