Entering the real estate investment market in St. Louis requires not only a solid strategy but also access to reliable financing. For many new investors, hard money loans offer a practical solution—especially when traditional loans are out of reach. However, understanding the nuances of hard money lending is crucial before committing to a loan.
Here are eight essential factors to consider when evaluating hard money loans for new investors in 2024 St. Louis.
Asset-Based Lending Model
Unlike traditional loans that focus heavily on a borrower’s credit history and income, hard money loans are primarily based on the value of the property being purchased. The approval process centers around whether the property presents a sound investment opportunity. Lenders like Westre Financial Group evaluate properties on their purchase price, renovation cost, soft charges, and potential resale value.
This approach provides an opportunity for new investors who may not have a strong credit profile but have found a promising property.
Loan Coverage and Limits
One of the significant advantages of Westre Financial Group’s model is their commitment to funding 100% of the purchase price. However, it is important to note that this does not include renovation funding. Borrowers are required to provide their own capital for rehab work. New investors must be prepared with sufficient liquidity to cover renovation costs independently.
Speed and Efficiency
Time is often critical in real estate deals. Delays in financing can lead to lost opportunities. Westre Financial Group offers fast funding with the ability to close as soon as the title company is ready. Property evaluations are typically completed the day after the application is submitted, allowing for efficient decision-making.
This speed can be a major asset for investors looking to move quickly in competitive markets.
Geographic Focus
Hard money lenders often specialize in specific regions, allowing them to understand local market dynamics more thoroughly. Westre Financial Group lends exclusively within St. Louis City and County, where they have operated for decades. New investors should consider the value of working with a lender that has deep, localized knowledge of the market.
Limiting operations to a defined area ensures more accurate property evaluations and better risk assessment.
Transparent Fee Structure
Transparency in fees is vital for budgeting and planning. Many lenders include hidden charges such as processing fees, appraisals, and credit checks. Westre Financial Group avoids these extra costs, charging only a 2% origination fee, which is added to the loan. This clarity allows investors to calculate returns and assess deal viability with fewer variables.
Pre-Approval and Application Process
The loan process begins with submitting a borrower application, which can include a pre-approval letter if needed. Once a property is selected, the investor completes a second application specific to the property. Proof of rehab funds must be submitted at this stage. The streamlined process ensures quick turnaround times and straightforward communication.
This clarity and efficiency are particularly valuable for new investors unfamiliar with lending procedures.
Experience and In-House Lending
The credibility and stability of the lender matter, especially for newcomers to real estate investment. Westre Financial Group brings over 20 years of experience in hard money lending and even longer in property ownership and management. All loans are funded directly—without outside investors or borrowed capital—and all loan processing is handled in-house.
This structure results in consistent policies, faster decisions, and a more predictable lending experience.
Conclusion
Navigating hard money loans for new investors in 2024 St. Louis requires a clear understanding of both the benefits and limitations of this financing model. For those focused on acquiring residential rental properties in the St. Louis area, Westre Financial Group offers a straightforward, transparent, and experienced option.
With a proven track record, localized expertise, and a commitment to fast and fair lending, Westre Financial Group remains a reliable resource for real estate investors in St. Louis.
