Over the summer, I was having dinner at Spot on the Dock, right at the edge of Lake Champlain, staring into the hugeness of the water toward New York. The sun was setting behind me, and the water seemed placid. But we all know what storms there can be on this lake. Even if you plan for a perfect day, the clouds can come over the green mountains and wash your plans away.
I was thinking that it’s a lot like real estate investing: you might have a great system for getting leads, find an incredible property, have your contractors in place…but then funding falls through. Your bank won’t loan you money. You’re scrambling to make the deal, and then the opportunity is gone.
We all know how it can be challenging to get a loan from traditional sources. After all, those of us in the real estate business often run short on cash. We have several properties in the hopper. We’re renovating one while we’re selling another and scouting a third. Some traditional lenders don’t always like the way we do business.
That’s why, if you’re like me, you frequently rely on hard money lenders. They are faster and more flexible than banks. The harder part is finding a lender with rates and terms that match your goals, someone who understands your business, and someone who can get you quick cash. Finding the right hard money lender in Vermont is key to your business’s success.
The Challenges of Finding the Right Hard Money Lender In Vermont
I am friends with real estate investors around the country and have worked here and there in my day. I know that different states have different laws—and that certain big hard money lenders don’t work in certain states. And, for good and for ill, Vermont is on a lot of “does not operate” lists. That’s less than ideal because you’ll have fewer lenders competing for your loan business. But you can also be assured that what IS here can be trusted.
What do you need to look for? I usually look for a few things.
- Rates. Hard money loans aren’t always going to have the lowest possible rates. What you have to do is find one that makes sense for your particular project.
- Speed. How fast will you get your money? You need to have it in hand before the competition gets the deal.
- Hoops. How many hoops are you going to have to jump through? Hopefully, very few.
- Reputation. Has this lender worked with people you know? Do they have good word-of-mouth or online ratings? This is important. You don’t want to put your eggs in a flimsy basket.
Not all hard money lenders are equally good for you, but vetting them with these general guidelines is a good start.
Three Hard Money Lenders in Vermont to Fund Your Fix-and-Flip
I’ve been investing in real estate here for a long time. Some of these Vermont hard money lenders have been around nearly as long, but some are new. They are all good choices for your hard money loans.
Sherman Bridge Lending
Sherman Bridge is one of the biggest names in hard money, and for a good reason. They have a reputation for being reliable and for understanding our business. You can get prequalified in as little as 30 seconds, and the rest of the process is pretty easy as well. Often, you can get your loan in 7-10 days.
At Sherman Bridge, you can get a standard 12-month term on your loan, or a 36-month one if you are buying a rental for income property. That doesn’t mean they do commercial property; single-family homes, 1-4 bedrooms are their standard. They loan 75% of the ARV, up to 90% of the purchase price, and up to 90% of the cost of repairs. While some places don’t care about credit scores, Sherman Bay requires a minimum score of 600, which isn’t too high of a bar.
Residential Capital (ResCap)
Residential Capital prides itself on offering no money down because they understand the liquidity issues in real estate. They also stand out for offering a fairly unique system of fixed terms, no matter what. This means that you’ll get 100% up to 70% of ARV, at 10% interest, for a 9-month term.
What differs is the amount of money they’ll lend you without seeing the property. So, what happens is you fill out a quick form. Then, you find out that you are approved for a certain dollar amount for a certain property type, like “up to $250,000 for single-family homes.” When you submit your project, it can all be finalized in 14 days.
So this is sort of an alternative approach but it means you have approval on record even if you are still looking for the right property. You have funding in your back pocket.
Patch of Land
As long as we’re talking about alternatives—this is Vermont, after all—let’s talk Patch of Land. This is crowdsourced investing. So, what happens is you provide the details of your project, and enough people “invest” in it. That’s how you get your money.
Now, this might seem weird, but it isn’t that much different from a normal hard money lender, at least on your end. But here’s the thing: there are thousands of people investing various amounts. There’s not one person who has to approve; if enough people put $50 down, you have your funding.
The terms are pretty typical—you can get it as low as 9.99%, and everyone who invested gets a little piece of it. It’s fast, too. You can get approved in five days.
So those are three of my favorites. But, what if there was an easier way to get these lenders to loan you money? What if you could get them to compete for your business?
A Better Way To Get Loans
Back in the day, I would look over the internet for hard money loans, comparing rates and all the rest. But, all that changed when I became an independently owned and operated HomeVestors® franchisee.
See, HomeVestors® has a proprietary software platform, UGVilleTM, which allows you to easily access the best lenders nationwide, especially in Vermont where remember, they are harder to find. It just makes things so much easier. All you have to do is enter the information about the house into the portal and almost right away you’ll hear back from several lenders with competing rates. That’s right: they’ll be competing over you. You get to choose which lender is the best for your project.
I was thinking about how much easier this made my life that night on the dock. I overheard a tourist couple behind me talking about how beautiful “Lake Champagne” was. A simple slip of the tongue, but it reminded me that I wanted to raise a glass to anything that made my professional real estate business easier.
So, if you’re interested in finding the best lenders in Vermont, request information about becoming a HomeVestors® franchisee. It’s how you make hard money lenders compete for your business.
Each franchise office is independently owned and operated.