When it comes to real estate investing, there are different ways to finance a deal. One option is to work with a hard money lender, which is sometimes called a private money lender. Hard money lenders are private individuals or companies that provide short-term loans secured by real estate. These loans are typically used by real estate investors who need to quickly purchase, renovate, or flip a property.
Essentially, they provide a source of quick and flexible financing for real estate investors. Unlike traditional lenders such as banks or credit unions, hard money lenders are not as concerned with a borrower's creditworthiness or income. Instead, they focus on the value of the property being used as collateral for the loan.
Clear2Close Title & Escrow, LLC is owned by Licensed Florida Real Estate Lawyer Ryan S. Shipp. For our client's convenience, our office has an In-House, onsite Hard Money Lender ready to make a good deal.
These logistics gives us the ability to quickly request and obtain necessary borrower information, review, and immediately make borrower loan qualification decisions. Call us today @ 561.600.0448.
Our Hard Money Loans are primarily made in Florida, but we have the ability to finance out of state transactions.
*The Purpose of the Loan cannot be for the Purchase of an Owner-Occupied Homestead Property.
Real estate financing begins with three questions: What property secures the loan, how will the proceeds be used, and how will the loan be repaid? Private financing can help investors purchase a property, replace existing debt, or bridge the period between acquisition and a sale or longer-term loan. It also creates payment obligations, closing costs, and a maturity deadline that should be understood before signing.
The financing purposes identified on our website include the following, subject to the lender's review and written approval.
Our website identifies Florida as the primary lending market. Transactions elsewhere require separate review of availability and the law of the property's state. We do not offer financing for the purchase of an owner-occupied homestead under the program described on this page. Contact us to confirm all other occupancy restrictions before applying.
Hard money generally describes real estate secured financing that emphasizes collateral and a relatively short repayment period. Private money describes the funding source: individuals, private companies, or investment funds rather than a conventional bank program. The terms overlap, but private loans can also have longer terms and more conventional underwriting.
Neither phrase is a universal legal category that removes regulation. The transaction's substance determines the applicable rules. A mortgage secures a debt against real property; a promissory note states the repayment obligation. Those documents serve different purposes and should be read together.
A commercial property loan may be secured by an office, retail building, warehouse, or other business property. A business-purpose loan may instead be secured by a residential rental or a house acquired for resale. Property classification and use of proceeds are separate questions.
Federal Regulation Z generally exempts primarily business, commercial, agricultural, and organizational credit. For an individual's mixed-purpose loan, the actual circumstances matter. Putting a commercial label on the paperwork is not a substitute for examining the use of funds.
The official commentary treats credit to acquire, improve, or maintain non-owner-occupied rental property as business-purpose credit, with special rules when personal occupancy is expected. For owner-occupied rentals, acquisition credit is deemed business-purpose when there are more than two units; improvement or maintenance credit receives that treatment when there are more than four. Other cases require analysis of the commentary's factors, including the relationship to the borrower's occupation, personal management, expected income, transaction size, and stated purpose.
A private lender may adopt stricter occupancy restrictions than the law requires. A program that excludes homestead purchases should not be described as universally permitting every other home-secured transaction. An occupied home raises purpose, consumer protection, title, and execution questions that must be reviewed separately.
A business entity's involvement should not be used to conceal personal use or evade applicable requirements. Disclose actual occupancy, intended occupancy, ownership, and proceeds use accurately. Ask whether moving into an investment property, transferring it, or changing its use requires lender consent.
Collateral-focused underwriting still requires a workable repayment plan. Depending on the program, a lender may review current value, purchase price, existing debt, property condition, marketability, rent, borrower experience, credit history, liquid funds, tax status, and the reliability of the proposed exit.
A property with substantial equity can still present unacceptable risk if it has title defects, environmental concerns, unresolved permits, an uncertain construction budget, or no realistic way to repay at maturity. Be prepared to explain both the transaction and the source of repayment.
Private financing may be structured around residential rentals, multifamily buildings, office and retail properties, industrial buildings, mixed-use projects, land, or development. Each category presents different valuation and operational questions. A list of industry categories is not a list of approved collateral for a particular lender.
Specialized products include construction loans, renovation draw loans, land acquisition loans, blanket or portfolio loans, junior mortgages, debt-service-coverage-ratio rental loans, and longer-term rental financing. Availability through the lending operation discussed here must be confirmed. These products should never be treated as interchangeable with an ordinary acquisition bridge loan.
Loan-to-value, or LTV, compares the loan amount with the lender's accepted property value. Ask whether the lender uses appraised value, purchase price, the lower of the two, or another documented basis. Combined LTV includes other secured debt and is particularly relevant to junior loans.
Loan-to-cost, or LTC, compares financing with eligible project costs. After-repair value, or ARV, estimates value after specified improvements. An ARV-based limit does not mean all acquisition and renovation costs will be funded. Valuation assumptions, draw timing, borrower equity, and completion risk remain important.
Illustration: A $300,000 loan against a lender-accepted $500,000 value has 60% LTV. If the purchase price is $450,000, the borrower needs $150,000 toward that price before closing costs and reserves. If the lender instead uses $450,000 as the value basis and applies a 60% limit, the maximum would be $270,000. These examples explain arithmetic and are not loan offers.
An interest-only payment covers interest without scheduled reduction of principal. Illustration: At 10% annual interest on a fully advanced $300,000 balance, a simple monthly calculation is $2,500. The actual documents may use daily accrual, a 360-day denominator, or another convention, producing different amounts.
At maturity, the principal remains due along with unpaid interest and other amounts owed. The borrower should confirm the exact maturity date, first and last payment calculations, servicing instructions, and whether an extension is available. A lender's willingness to consider an extension is not a promise to grant one.
Florida section 697.05 contains balloon mortgage legend requirements and exemptions. Among the exemptions are qualifying first mortgages and mortgages with interest-only periodic payments and the original principal payable at maturity. A balloon balance therefore does not automatically establish that the statutory legend is required.
Compare total dollars required at closing and total dollars payable through the expected payoff date. Possible charges include origination points, broker fees, underwriting, valuation, document preparation, legal review, title insurance, settlement charges, recording, taxes, inspections, servicing, extensions, and prepayment charges.
One point is 1% of the loan amount. If a $300,000 loan carries two points, the points equal $6,000. Fees withheld from proceeds reduce cash delivered without necessarily reducing the debt. Ask which charges are refundable if the loan does not close and which are owed even after a denial or withdrawal.
An interest reserve is money set aside to make interest payments. A repair reserve funds approved work. Neither is free money, and either may reduce proceeds available for acquisition. Determine who controls the reserve, whether interest accrues on it, and how unused funds are handled.
Florida documentary stamp tax generally applies to taxable notes and recorded mortgages at $0.35 per $100 or fraction of indebtedness. The $2,450 cap for certain unsecured or unrecorded obligations should not be assumed to cap tax on a recorded real property mortgage. Refinances, renewals, and prior tax payments require transaction-specific calculation.
Nonrecurring intangible tax generally applies at 0.002 to obligations to the extent secured by Florida real property. For a fully taxable $300,000 mortgage loan secured entirely by Florida real estate, the illustrative documentary stamp amount is $1,050 and intangible tax is $600, before recording and other costs. Exemptions, property allocation, and prior payments may change the result.
Florida generally limits covered loans of $500,000 or less to 18% simple annual interest, subject to statutory exceptions. For obligations exceeding $500,000, section 687.03 refers to the limit in section 687.071. Exactly $500,000 falls on the smaller-loan side of that threshold.
Section 687.071 addresses willfully and knowingly charging rates exceeding 25% annually and provides more severe consequences above 45%, unless specifically allowed by law. A commercial borrower is not automatically exempt from these rules.
The note rate alone does not resolve the issue. Lender-retained fees, discounts, commissions, and other compensation may affect the legal calculation. Do not treat every third-party expense as interest or every charge labeled a fee as excluded. Default pricing, extensions, and early payoff also require review. Exceptions and statutory calculation provisions must be applied to the actual transaction.
Florida licensing analysis starts with section 494.001. Its mortgage loan definition includes consumer residential credit and certain commercial or larger multifamily loans. A business-purpose exemption from federal consumer disclosures does not, by itself, resolve Florida licensing.
Section 494.00115 contains exemptions with different scopes. Examples include qualifying financial institutions, sellers receiving purchase-money mortgages on their own property, and certain lenders making only nonresidential mortgage loans and selling only to institutional investors. The individual own-funds exemption includes a restriction against holding out publicly as a lender. Exemption eligibility must be supported by the actual facts and activities.
Borrowers should identify the lender and any broker, ask for applicable license information, and verify the appropriate records rather than assuming that a familiar business name establishes authority.
Florida's Commercial Financing Disclosure Law expressly excludes transactions secured by real property under section 559.9612(3)(a). That exclusion concerns this specific disclosure law. It does not establish an exemption from usury, mortgage licensing, contract obligations, or other federal and state requirements. An unsecured business financing product requires its own scope analysis.
For exempt business-purpose real estate credit, the federal consumer Loan Estimate and Closing Disclosure framework generally does not apply through Regulation Z. A lender may nevertheless provide detailed written disclosures and a settlement statement. Absence of consumer forms does not eliminate contractual obligations or other applicable law.
RESPA also contains a business-purpose exemption. Its temporary-financing rules have specific conditions; describing a transaction as a bridge or construction loan does not establish a blanket exemption from every lending law.
Consumer-purpose transactions may raise separate disclosure, ability-to-repay, high-cost mortgage, rescission, and servicing requirements. Those questions must be assessed before a lender accepts a transaction outside its confirmed business-purpose program.
Regulation B applies to business credit, with specified exceptions and modified procedures. Commercial applicants should not assume that all anti-discrimination and application-notification protections disappear. Adverse-action requirements vary with the category of business credit and applicant.
The appraisal-copy rule for covered first-lien dwelling applications also extends to business-purpose loans. Subject to its timing and waiver provisions, it requires copies of appraisals and other written valuations and notice of the right to receive them. A residential investment loan can therefore have requirements even when exempt from Regulation Z.
The settlement agent coordinates the closing under the parties' instructions, including title requirements, documents, receipts, authorized disbursements, and recording. The lender makes the credit decision. Title work does not establish that an investment will be profitable or that the borrower can refinance later.
A title commitment identifies proposed coverage, conditions to issuance, and exceptions. Read it before closing. A lender's policy protects the lender's insured interest; it does not substitute for an owner's policy protecting the purchaser. Coverage depends on the actual policy, exceptions, and endorsements.
Important closing questions include existing mortgage releases, judgments, legal access, easements, taxes, association balances, surveys, authority to sign, and any required corrections. Matters outside the standard title search or coverage may require separate inspections, searches, or endorsements.
Ask whether the lender, broker, title company, or law firm has common ownership or a referral relationship, and identify who is providing each service. On covered RESPA transactions, kickbacks and unearned fee arrangements are prohibited. The affiliated business arrangement provisions impose conditions that include disclosure and restrictions on required use, subject to the rule's exceptions.
An exemption from RESPA does not itself establish that every referral arrangement is permissible under other law. Clear identification of the parties and charges helps borrowers evaluate the transaction.
Compare these documents with the approved term sheet/ letter of intent. Ask for clarification of discrepancies before execution. Do not assume a preliminary quote overrides final signed terms.
Borrowing through an LLC does not prevent an owner from becoming personally liable under a guaranty. Full recourse generally permits recovery beyond the property, subject to the documents and applicable law. Limited guarantees may cap exposure or activate for specified conduct. Nonrecourse language may contain carveouts that materially change the risk.
Cross-collateralization places multiple assets behind an obligation. Cross-default can connect defaults across separate loans. A blanket mortgage may require a specified release price to sell one parcel. Ask whether a partial sale reduces the balance, whether remaining collateral must satisfy a ratio, and whether release approval is discretionary.
For any loan that finances work, confirm the approved scope, budget, contingency, permits, contractor qualifications, insurance, and completion deadline. Determine whether the borrower must advance money before reimbursement and whether interest applies only to funded amounts or to a larger committed balance.
Draw conditions may include inspections, invoices, lien releases, title updates, and retainage. Construction liens can disrupt priority and funding. Florida's notice-of-commencement rules are part of the lien framework and should be coordinated with the lender and closing professionals before work begins.
A delay can consume interest reserves and push completion beyond maturity. The borrower should budget for overruns and obtain written approval before changing the scope or using loan proceeds for a different purpose.
Review actual leases, rent collections, concessions, deposits, arrears, renewal rights, termination rights, and tenant obligations. A stated rent roll should be reconciled with supporting documents. Consider estoppels and subordination, nondisturbance, and attornment agreements where appropriate.
Assess permitted use, zoning, access, building condition, flood exposure, insurance availability, pending assessments, property taxes, and environmental concerns. A valuation is not a structural inspection or environmental clearance. Determine which reports the lender requires and which the buyer needs independently for the intended use.
A prepayment provision may require a percentage fee, minimum interest, an exit fee, or another formula. Paying off early can therefore cost more than the borrower expects. Obtain a written example for the planned payoff date and ask whether charges apply after default, sale, or refinancing.
An extension may require timely notice, a fee, updated value, additional principal reduction, current insurance, and no existing default. Request it before maturity. Continuing monthly payments after maturity should not be assumed to extend the loan.
For a refinance exit, investigate the replacement lender's eligibility, property seasoning, occupancy, appraisal, cash flow, and documentation requirements before taking the bridge loan. For a sale exit, budget for marketing time, commissions, carrying costs, and a lower sale price. Maintain a contingency if the first exit fails.
Default may result from unpaid money or breached obligations, such as failure to insure, unpaid taxes, unauthorized transfers, misuse of funds, or failure to complete work. The documents and applicable law determine notice, cure rights, acceleration, and remedies.
Florida mortgages are foreclosed in equity under section 702.01. A private lender does not acquire ownership merely because a payment is missed. A foreclosure sale also does not necessarily satisfy the debt; section 702.06 addresses deficiency relief, subject to its conditions and limitations.
An assignment of rents may give the lender enforceable rights in rental income under section 697.07. Bankruptcy can stay foreclosure and collection against the debtor, subject to exceptions and court relief. It does not automatically eliminate a secured claim or create a guaranteed extension.
A sound lending process documents authority to lend, the loan purpose, accurate collateral ownership, valuation, priority, underwriting, pricing, funding conditions, servicing, and enforcement. An exemption from one regulatory scheme does not replace review of the others.
Raising investor capital is a separate compliance question. A private lending fund or sale of investment interests may implicate securities offering and investment adviser requirements. The SEC describes private funds as raising capital through exempt offerings and identifies adviser registration or exemption considerations. State securities requirements also require review. A borrower lending page should not be repurposed into an investor solicitation without that analysis.
Not necessarily, but collateral-focused lending does not mean credit is ignored. Each lender determines the role of credit, liquidity, experience, and repayment capacity.
It may, when the lender approves the transaction and title, valuation, documents, insurance, and funds are ready. A target closing date is not an unconditional promise.
No. Private describes the source of funds. Actual loan purpose, collateral, borrower, and other circumstances determine legal treatment.
Organizational credit has a Regulation Z exemption, but an entity name does not resolve every statute or justify inaccurate descriptions of the transaction. Ownership, purpose, and the actual structure still matter.
No. Title, taxes, recording, valuation, legal, insurance, broker, and other costs may remain. Obtain the itemized estimate.
Only if another lender approves the replacement loan and the existing loan permits payoff on the applicable terms. Refinancing is not guaranteed by property appreciation or the original lender's approval.
Those are specialized categories. Ask whether they are offered and obtain a separate program summary. Do not infer availability from a general hard money description.
A purchase may involve an owner's policy and a lender's policy, but the lender's policy alone does not protect the purchaser's ownership interest. Review the proposed coverage.
The debt remains subject to its maturity terms. Seek any extension or alternative financing early. Failure to repay may lead to default remedies.
An assignment of rents may permit collection or other relief under the documents and Florida law. Tenants and borrowers should follow verified lawful instructions rather than informal demands.
No. The property's state and other applicable jurisdictions may impose additional licensing, usury, disclosure, recording, tax, and foreclosure rules.
Appraisal: A professional opinion of value for a stated property and effective date.
ARV: Estimated value after specified repairs or improvements.
Bridge loan: Interim financing between a present transaction and a future repayment event.
Business-purpose loan: Credit primarily intended for business use rather than personal, family, or household use.
Cash-out: Proceeds available after approved payoff obligations, reserves, and closing costs.
CLTV: Combined loan balances compared with accepted collateral value.
Commitment: A lender's statement of willingness to lend on specified terms and conditions.
Debt service: Required payments of principal and interest during a stated period.
DSCR: Cash flow measured against debt service; calculation methods vary by program.
Draw: An advance released under specified funding conditions.
Equity: Value remaining after debt, subject to valuation and transaction costs.
Exit strategy: The planned source and timing of repayment.
Guarantor: A person or entity undertaking liability for another borrower's obligation.
Interest reserve: Funds held for future interest payments.
Lien priority: The ranking of competing claims against collateral.
LTC: Loan amount compared with eligible project cost.
LTV: Loan amount compared with the lender's accepted value.
Maturity: The date the remaining obligation becomes due.
NOI: Net operating income under the stated calculation, ordinarily before debt service.
Points: Charges expressed as percentages of the loan amount.
Recourse: Potential recovery against the borrower or guarantor beyond collateral.
Retainage: Funds withheld pending completion or satisfaction of conditions.
Seasoning: A lender's required period of ownership, payment history, or stabilized operations.
Subordination: An agreement changing a lien or contractual interest's priority.
Term sheet: A summary of proposed terms whose binding effect depends on its language.
Title commitment: An undertaking to issue title coverage subject to stated requirements and exceptions.
Underwriting: Evaluation of the borrower, collateral, structure, and repayment risk.
Call Clear 2 Close Title & Escrow, LLC at 561.600.0448 or email us at info@clear2closefl.com. Provide the property address, requested amount, transaction purpose, existing debt, target closing date, and proposed repayment plan. Final financing depends on the lender's written approval, complete documentation, and satisfaction of closing conditions.
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