How to Get a Hard Money Loan in California

If you’re a real estate investor who needs financing quickly, understanding how to get a hard money loan in California can open up opportunities that may be difficult to finance through a traditional bank.

Hard money loans are commonly used for investment real estate purchases, refinances, cash-out transactions, renovations, and other situations where speed and flexibility are important. Unlike conventional financing, hard money lenders tend to focus more heavily on the property and available equity rather than relying primarily on the borrower’s credit score and debt-to-income ratio.

At Wilshire Quinn Capital, we are a direct portfolio lender providing short-term real estate financing in California and nationwide. Here’s what investors should know before applying for a hard money loan in California.

What Is a Hard Money Loan?

A hard money loan is a short-term loan secured by real estate. These loans are generally provided by private or portfolio lenders rather than traditional banks.

The biggest difference is the underwriting process.

Traditional lenders commonly place significant emphasis on credit history, income, debt-to-income ratios, and other personal financial factors. With asset-based lending, the property’s value and the equity securing the loan play a much larger role.

This can make hard money financing useful when an investor needs to move quickly, is purchasing a property that requires substantial renovations, or has a financing scenario that doesn’t fit conventional lending guidelines.

You can learn more in our guide to what hard money is and how it works.

How to Get a Hard Money Loan in California

Although every lender has its own underwriting guidelines, obtaining a hard money loan generally starts with the property itself.

Here are several of the most important factors to consider.

1. Find a California Hard Money Lender

Your first step is choosing a lender experienced with the type of real estate you’re financing.

Look beyond the advertised interest rate. Investors should also consider:

- Whether the company is a direct lender or broker

- Property types the lender finances

- Loan amounts

- Loan-to-value requirements

- Loan terms

- Origination fees

- Geographic lending areas

- Typical closing times

- Experience with California real estate

Wilshire Quinn is a direct portfolio lender, not a loan broker, with California offices in San Diego, Los Angeles, and San Francisco.

Learn more about working with a California hard money lender.

2. Determine How Much Equity You Have

One of the most important considerations in hard money lending is loan-to-value (LTV).

LTV compares the requested loan amount with the property’s value. Because the real estate serves as collateral for the loan, lenders generally want sufficient equity protecting the transaction.

For example, Wilshire Quinn’s current lending program provides financing of up to 60% LTV. For rehabilitation loans, financing may reach up to 60% of the after-repair value (ARV), subject to additional purchase-price limitations and underwriting requirements.

The exact amount available will depend on the property, transaction, borrower, and overall loan scenario.

3. Know What Type of Property You’re Financing

Hard money financing can potentially be used for many different types of investment real estate.

Wilshire Quinn considers properties including:

- Multifamily properties

- Non-owner-occupied single-family investment properties

- Condominiums

- Retail centers

- Office buildings

- Industrial and warehouse properties

- Hotels and motels

- Healthcare and assisted living facilities

- Mixed-use and special-purpose properties

- Parking garages and lots

Investors can review additional options on our lending options page.

The property’s location, condition, intended use, value, and income potential can all affect how a lender evaluates a transaction.

4. Have a Clear Purpose for the Loan

A lender will also want to understand what you’re trying to accomplish. California real estate investors may seek hard money financing for a:

- Purchase: Quickly acquiring an investment property when conventional financing isn’t practical.

- Refinance: Replacing an existing loan with short-term financing.

- Cash-out refinance: Accessing equity in an investment property for another investment, renovation, or business purpose.

- Rehabilitation project: Purchasing or improving a property that needs significant renovations before it can be stabilized or sold.

- 1031 exchange: Obtaining financing to help complete a time-sensitive real estate transaction associated with an exchange.

- Clearly defining the purpose of your financing helps the lender evaluate whether your scenario fits its lending guidelines.

Before moving forward with a hard money loan, it’s important to understand all the associated costs, including lender points and origination fees. Learn more how lender points affect your total borrowing costs and what to consider when comparing financing options.

5. Prepare Your Exit Strategy

Hard money loans are typically designed as short-term financing, so borrowers should have a realistic plan for repaying the loan.

This is commonly called an exit strategy.

Depending on the investment, an exit strategy might include refinancing through a conventional lender after stabilizing the property, selling a renovated property, selling another asset, or obtaining longer-term financing.

For example, an investor might use a hard money loan to purchase and renovate an apartment property. Once renovations are complete and occupancy improves, the investor could refinance into longer-term financing.

A well-defined exit strategy can be an important part of evaluating whether short-term financing makes sense for a particular investment.

6. Submit Your Property and Loan Information

Once you’ve identified a lender, you’ll need to provide information about your proposed transaction. Depending on the situation, a lender may ask about the:

- Property address

- Property type

- Estimated property value

- Purchase price

- Requested loan amount

- Existing loan balance

- Purpose of the loan

- Renovation plans

- Borrower information

- Proposed exit strategy

Wilshire Quinn allows borrowers to submit a hard money loan request online. Because hard money underwriting focuses heavily on the underlying real estate, the approval process can often move faster than conventional bank financing.

7. Review the Loan Terms Carefully

Before accepting financing, understand the complete cost and structure of the loan.

Important factors include the interest rate, origination points, closing costs, loan term, monthly payment structure, LTV, and any other applicable fees or requirements.

Wilshire Quinn’s current bridge lending parameters include loans from $500,000 to $20 million, terms generally ranging from 3 to 18 months, interest-only payments, and rates currently listed between 9% and 12%. Origination fees generally range from 1 to 5 points, depending on factors such as property, location, LTV, creditworthiness, loan amount, and term.

Loan programs and terms can change, and every transaction is evaluated individually, so borrowers should request current terms for their specific scenario.

How Fast Can You Get a Hard Money Loan in California?

Speed is one of the primary reasons investors consider hard money financing.

A traditional real estate loan can involve extensive underwriting and documentation. That timeline can create problems when an investor needs to close quickly on a competitive property.

Wilshire Quinn currently offers pre-approval in approximately 24 hours and typically funds qualifying transactions in five to seven days.

Actual closing times depend on the property, documentation, valuation, title, transaction complexity, and other underwriting considerations.

For investors competing for California real estate, having access to a lender capable of making decisions quickly can be an important advantage.

Hard money loans can offer real estate investors a faster, more flexible financing option when traditional lending timelines don’t align with their investment goals. Understanding why borrowers choose hard money lenders can help you determine whether this type of financing fits your next deal. Discover why borrowers utilize hard money lenders.

Do You Need Good Credit for a Hard Money Loan?

Not necessarily.

Credit can still be considered, but hard money and bridge lenders generally place greater emphasis on the property’s value and available equity than conventional banks.

This is why hard money financing may be worth exploring for investors whose credit profile, income documentation, or property doesn’t fit conventional underwriting standards.

However, having weaker credit doesn’t automatically mean a borrower will qualify. The entire transaction—including property value, equity, loan amount, exit strategy, and borrower profile—still needs to meet the lender’s underwriting requirements.

How Much Do You Need to Put Down on a Hard Money Loan?

There isn’t one universal down payment requirement for every California hard money loan. Instead, lenders commonly evaluate transactions based on LTV and the amount of equity protecting the loan.

For purchases, this means the borrower may need to contribute a substantial portion of the property’s purchase price. Refinances work differently because existing equity in the property may provide the required collateral.

The exact equity requirement will depend on your lender and transaction.

Understanding your down payment and equity requirements is an important step when planning a hard money loan, especially for time-sensitive real estate investments. Learn more about fast 1031 exchange financing with hard money loans.

What Are the Benefits of a Hard Money Loan?

Hard money financing isn’t the right solution for every real estate transaction, but it can provide several advantages for investors.