Looking for Hard Money Lender for $50K or Less – 10-30 Year Mortgage?

[Eduardo Cambil]

Looking for Hard Money Lender for $50K or Less – 10-30 Year Mortgage?

Hey BiggerPockets Community,

I’m on the hunt for financing options for properties priced at $50,000 or below, and I’m running into some roadblocks. I’m hoping someone here has insights or recommendations!

What I’m Looking For:

• Loan amounts $50K or less
• 10-year or 30-year mortgage terms (not just short-term fix & flip loans)
• Ideally 100% financing or very low down payment
• A lender that finances buy-and-hold rental properties

What I’ve Found So Far:

I’ve come across a few lenders like RCN Capital, EquityMax, and some credit unions, but they either:

• Have high closing costs ($3K-$5K+ on a $30K loan, which is crazy)
• Only offer short-term hard money loans (12-24 months)
• Require large down payments that don’t make sense for small deals

I’m open to hard money lenders, DSCR loans, or any creative financing solutions that could work for these lower-price-point properties.

Questions for You All:

• Do any hard money lenders offer 10-30 year terms on $50K or lower loans?
• Who’s financing buy-and-hold rentals at this price point?
• Any strategies to reduce these insane closing costs?
• Have you successfully borrowed at this price level? If so, how?

I’d love to hear from investors who have tackled this issue before. Any referrals or experiences would be super helpful! Thanks in advance.

Looking forward to your insights!

[Patrick Roberts]

Quote from @Chris Seveney:

Quote from @Eduardo Cambil:

Looking for Hard Money Lender for $50K or Less – 10-30 Year Mortgage?

Hey BiggerPockets Community,

I’m on the hunt for financing options for properties priced at $50,000 or below, and I’m running into some roadblocks. I’m hoping someone here has insights or recommendations!

What I’m Looking For:

• Loan amounts $50K or less
• 10-year or 30-year mortgage terms (not just short-term fix & flip loans)
• Ideally 100% financing or very low down payment
• A lender that finances buy-and-hold rental properties

What I’ve Found So Far:

I’ve come across a few lenders like RCN Capital, EquityMax, and some credit unions, but they either:

• Have high closing costs ($3K-$5K+ on a $30K loan, which is crazy)
• Only offer short-term hard money loans (12-24 months)
• Require large down payments that don’t make sense for small deals

I’m open to hard money lenders, DSCR loans, or any creative financing solutions that could work for these lower-price-point properties.

Questions for You All:

• Do any hard money lenders offer 10-30 year terms on $50K or lower loans?
• Who’s financing buy-and-hold rentals at this price point?
• Any strategies to reduce these insane closing costs?
• Have you successfully borrowed at this price level? If so, how?

I’d love to hear from investors who have tackled this issue before. Any referrals or experiences would be super helpful! Thanks in advance.

Looking forward to your insights!

 BRUTAL HONEST RESPONSE:

You are not going to find a 100% financing loan for under $50k. Most buy and hold rentals are $75k min if you go DSCR route, some local banks can go that low but tehy are not going to lend 100% as their charter will not allow them too unless its a special government sponsored loan program and that is for owner occupied only - not for investment purposes.

@Chris Seveney is on the money. Also, true loan origination costs (not points), such as processing, legal, underwriting, appraisal, credit reports, etc are largely fixed. Processing a $50k loan is almost as much work as a $500k loan, so the costs passed through to the borrower are the same. Same goes for Title - while title policies may be cheaper, the recording and other fees are the same. The result is that you're going to have loan costs similar to most other loans. 

Additionally, because the loan is so small, the yield relative to the work is lower, so youre going to get hit with points up front and higher rates to make the loan profitable enough to be worthwhile. This is why so few lender go below $75k - too much squeeze for the juice.

Another issue is the collateral itself - most properties in this price range are basically niche, depreciating assets. They are difficult to liquidate and rehab/turn costs are relatively high compared to the property value if taken back as REO. Between the disproportionately high amount of work and overall risk given the yield, most lenders just avoid this range altogether.

Long story short, what youre looking for doesnt exist. Youre going to have to adjust your expectations.