Real estate investments in South Florida are typically profitable because of the area’s booming economy, recently marked by the rapid progress in tourism, agriculture, and manufacturing businesses. London Financial (LFC) is an alternative lending company (located in Key Biscayne) that supports the financing of real estate via private capital. It’s helmed by Edward London, a veteran real estate professional with decades of experience as a general contractor and investor.
We have prepared this guide to help those in the process of vetting lenders. We will help you make info-driven decisions by covering London Financial’s:
- Products and services
- Loan terms and processing logistics
- Top competitors
London Financial—Lending Format and Product Types
London Financial broadly funds all types of property deals and construction projects as long as the borrowing intent is investment or business. The group does not service mortgages for primary residences, i.e., owner-occupied homes.
LFC is a lender for hard money financing, a format of mortgage that’s underwritten based on collateral and not the borrower’s credit score or income potential. Hard money loans are the rage in flourishing real estate markets because of factors like:
- Relaxed entry barriers (anyone with healthy collateral can qualify)
- Reduced paperwork (compared to banks)
- Fast funding (to fulfill competitive transactions)
The lending activities of hard money lenders like LFC are generally not regulated by the Federal Deposit Insurance Corporation (FDIC), allowing them to operate without being burdened by the same regulations as banks and other conventional financiers.
Source: Pavel Danilyuk
LFC currently offers debt products for the following scenarios:
- Property acquisition
- Addition or renovation
- Financial instrument purchase
London Financial has not described its products in detail, but we will give you an idea of the essence of each.
Property acquisition loans are used to purchase brand-new structures for business use or investment (rental or non-rental). You can also acquire these loans to get secondary homes, vacation homes, or development land. In some cases, these products may support the acquisition of other real estate businesses. The typical collateral for property acquisition loans can be:
- Single-family homes
- Multi-family homes
- Commercial real estate structures
- Industrial parks
LFC typically lends a loan-to-value (LTV) ratio based on the acquisition value. Unless it’s specified in the contract, the funds cannot be used for any expense beyond the price. If you require funds for repairs, development, or property management, you have to consider other products from the lender.
Addition or Renovation
London Financial offers addition or renovation loans for enhancing the functionality or market value of properties. These products can support a wide spectrum of borrowers, including rental property owners and house flippers. In case of property flipping, you have to contact LFC to check if they finance the repairs along with the purchase cost.
Like all property rehabilitation lenders, LFC will see if the proposed renovations make sense in terms of increasing the tangible value of the property. The company monitors construction work closely and may even conduct monthly inspections to see how the property is shaping up.
Bridge financing in real estate is used as a “bridge” to another transaction. London Financial doesn’t provide extensive info about its bridge loans, but they usually work under three scenarios:
- Emergencies—You need funds fast, and your traditional lender cannot close the loan promptly. You get a bridge loan to meet your immediate needs and repay (or refinance) when you eventually qualify for permanent financing
- Property transitions—If you’re selling a property and relying on its sale proceeds to buy a new one, a bridge loan can help you gap the timing difference. It allows you to acquire a new property without waiting for the old home to sell. You can pay off the loan whenever you complete the sale
- Partner buyouts—Many business professionals use bridging to buy out an investment partner and settle their interests. The loan is settled with future cash inflows
London Financial specializes in construction loans for small and midsize developers in South Florida. Many hard money lenders in the area avoid construction financing because the underlying collateral isn’t ready or marketable at a redeemable value. LFC takes the risk by getting deeply involved in construction projects.
The group typically lends on projects involving the construction of luxury spec homes. Because of complex risk variables, LFC will:
- Conduct special in-house reviews of your construction plans
- Suggest alterations to lower costs (if the underwriters find your existing budget too extravagant)
- Recommend ways to improve the final product
- Carry out monthly inspections to ensure the investment is safe
While the processing may seem too intrusive, LFC enjoys the upper hand because of the lack of construction financiers beyond banks.
Source: Akin Vector
Refinance loans in real estate are used to lower monthly interest rates or to extract equity. If you want the former, you have to go for a rate-and-term refinance. In case you’re looking to get some extra cash out of the refinance, you have to go for cash-out refinance programs. Real estate investors get a cash-out refinance to increase operational liquidity or purchase additional assets.
London Financial has provided no info on the types of refinance options available, so you have to ask the lender for more details.
Financial Instrument Purchase
Financial instruments refer to equity and debt instruments (as in contracts) that indicate the holder’s stake in a particular real estate property. The holder of the instrument does not own the property directly but is liable to receive a set sum on the due date. From a practical viewpoint, financial instruments are like mortgage notes that provide real estate-like yield without actually owning a property.
LFC can help you acquire a financial instrument and diversify your portfolio. While the details of the product are kept under wraps, it’s a unique form of financing that only a few lenders offer.
Common Lending Parameters at LFC
London Financial has no set rules when it comes to determining a loan package, but it follows some common lending parameters—outlined in the table below:
|Repayment||Interest-only monthly payments + lump sum repayment at maturity|
LFC’s interest rates are pretty standard in the South Florida market. The lower limit for the loan size can be a problem for investors who deal in small- or medium-range properties. There are several lenders in the area offering longer tenures than London Financial.
The lender’s origination fee is between 1% and 2%, but we have no info on the other cost components involved. You may have to pay for administrative charges, legal costs, processing fees, underwriting fees, and funding fees, which typically add $5,000–$8,000 to your out-of-pocket expenses.
Source: Mikhail Nilov
LFC—Application Process and Qualification Guidelines
You have to fill out an online form to request loans at London Financial. A loan consultant will call you back to check if they should begin the evaluation process. LFC does not have any benchmark for credit score or debt-to-income (DTI) ratio, but an applicant is typically scrutinized on facets like market risk, LTV/loan amount requested, and other deal-specific logistics.
Why It’s Sensible To Explore More Than One Lender
When you’re navigating private financing, keep in mind that every lender has its pros and cons, and a practical strategy is to explore beyond a particular one. Take LFC, for instance—the lender can fund numerous scenarios but isn’t open to financing owner-occupied or mixed-use residences and investment needs below $500,000.
Checking out other lenders helps you keep your options open. You gain insight into prevalent rates, additional costs, and average funding timelines in the market, all steering you toward the best decision. Going through user reviews is another important part of the vetting process, as they give you the big picture of how a lender responds to clients and handles the processing.
We found very few customer reviews for LFC online—but all of them praised the company for supporting land and construction loans. Still, some people may not be comfortable with the constant inspections and scrutiny involved in the process.
If you want timely construction or hard money financing with minimal inspections and entry barriers, you can go for Hard Money Loan Solutions (HMLS). The lending group is headquartered in Delray Beach, Florida, and provides funding across the state for various real estate deals, such as:
- Property acquisition
- Rehab/property flipping
- Refinance and cash-out refinance
- Mezzanine and business financing
- Short sale and foreclosure management
Conquer the Best Deals in Florida With Hard Money Loan Solutions
Hard Money Loan Solutions is backed by highly experienced real estate investors and entrepreneurs who prioritize a client’s welfare above profits. HMLS is a direct lender open to every category of borrowers, including:
- Rental property owners
- Property flippers
- Homeowners (for primary residences)
- Foreign nationals
HMLS loans are fully based on the value of the real estate. Your credit score, financial history, investment or business experience, and other credentials do not influence the underwriting process. Even if you’re going for construction financing, the team ensures the processing is practical and painless. Contact HMLS today to get expert funding solutions for any real estate scenario!
Source: Google Reviews
HMLS has a consistent 5-star rating on Google due to the team’s customer-friendly approach. Some of the service features you can expect include:
- 100% lending transparency
- Light paperwork
- Flexible lending terms
- Honor-bound funding
- Time-efficient processing and closing (often within ten days)
- Responsive and savvy team
- Free personal guidance on real estate financing
The group can also provide financing in challenging situations when the borrower has been turned down by other lenders. The team guarantees you the best rates and terms according to your deal and repayment strategy. HMLS saves you up to $8,000 in additional costs because the group drops several junk fee elements from the equation, including:
- Processing fees
- Underwriting fees
- Draw fees
- Rate-locking fees
- Digital retention fees
HMLS Services Any Loan Size With Tailored Terms
HMLS caters to big and small borrowers and has a decent spread in terms of loan size—borrow as little as $100,000 or as much as $50 million! The group designs products based on case-by-case analysis so that the borrowers have access to fair pricing and a comfortable repayment schedule. Check out the common lending parameters at HMLS in the table below:
|Component||HMLS Lending Parameters|
|Property type||Single-family or multi-family homes|
Commercial properties (mall, office, etc.)
|Amortization||No—interest-only monthly payments and a lump sum settlement at maturity|
|LTV||Up to 70% (of the purchase price or current collateral value—whichever is the lower)|
|Origination fee||2 points or 2%|
|Closing time||3 days to 2 weeks|
|Prepayment penalty||No penalty if repaid after 6 months|
Besides collateral value, HMLS looks at the following factors while underwriting:
- Ability to meet an LTV (for purchases)
- Equity in the property (for refinances)
- Viability of construction plans (for construction loans)
Source: Kampus Production
Apply for an HMLS loan online and qualify for funding within a day. The vetting process usually plays out in three stages:
- Phone verification—HMLS analysts go through your application and contact you over the phone to:
- Confirm your interest
- Ask funding-related questions
- Answer client queries
- Property appraisal—HMLS seeks out the latest appraised value of the property to create a custom-tailored loan package
- Legal checks—When the borrower accepts the loan terms, the team works with its legal partners to tend to the documentation requirements before funding
HMLS Provides Hands-On Guidance for Success in the Local Market
HMLS doesn’t stop at funding—the group considers client success the ultimate win. Every client gets case-specific advice and real-time assistance. The staff can also introduce you to a network of other real estate professionals if requested. The group is considerate and offers innovative loan modifications and alternative repayment strategies in case you face cash flow issues down the line.
HMLS has your back for profit-making and consumer-purpose real estate loans—contact the group to access the funding you need!
Other Useful Reviews
We have a couple of other lender reviews in our knowledge base. Use the table below to navigate to a desired option:
We recommend exploring four to five lenders at a time, as exploring too many can be overwhelming.
Featured image source: Mikhail Nilov