Hard money, fix and flip and DSCR loans in New York: your questions answered

It is a mortgage on an investment property that is funded by private institutional investors, not a bank. The decision is based on the property and the deal: its value after renovation or construction, or whether its rent covers the payment. Your job history and debt-to-income ratio are not reviewed.

New York Fix and Flip Loans is the New York division of Optimus Capital Corp, a nationwide hard money lender that works only with real estate investors. It is run by Andrew Shanti, Senior Vice President, who has worked in lending and real estate since 2005.

All five boroughs of New York City (Brooklyn, Queens, the Bronx, Manhattan and Staten Island) and Nassau, Suffolk and Westchester counties. Through Optimus Capital Corp we also lend in other states.

Fix and flip loans, DSCR loans for rental property, ground-up construction loans, mid-rehab and completion loans, rental portfolio loans, and commercial loans on multifamily, mixed-use, hospitality, office, industrial and retail property.

Choose a lender that funds most of the purchase and all of the renovation, pays draws promptly, and allows a term long enough for DOB approvals and, in landmarked areas, Landmarks Preservation Commission review. We lend up to 90% of the purchase and 100% of the rehab on terms of 6 to 24 months. See investment property loans in New York.

It means the borrower will not live in the property. Flips, rentals and new builds for sale are non-owner-occupied, and they are financed with business-purpose loans. Every loan we make is on non-owner-occupied property.

No. We lend on investment property only. The exception is commercial property occupied by the owner’s business. For a primary residence, a conventional NMLS-licensed mortgage broker is the right place to go.

Co-op apartments are shares in a corporation, not real property, and boards set their own rules on investors, subletting and financing. Investor loans like ours are made on one- to four-family homes, condos, multifamily and mixed-use buildings, not on co-op shares.

As a rule, no, except on large commercial loans. The one cost before closing on most loans is the appraisal, which you pay to the appraisal company.

Programs begin at a 600 score. Fix and flip loans start at 600 with reduced leverage, while the best terms, 90% of purchase and 100% of rehab, are for scores of 720 or higher. Rental loans are available at 600 with up to 70% loan-to-value.

No. We look at three things: enough cash to buy and carry the property, a property that can cover its payment now or once the work is finished, and a credit record that shows debts are paid on time.

No. These are business-purpose loans and are not reported on personal credit like a conventional mortgage.

As many as your deals support. There is no limit on the number of properties we will finance for one investor.

Yes. We will need the articles of organization, the IRS EIN letter, a signed operating agreement showing each member’s share and, if the LLC is over a year old, a certificate of good standing.

New York City charges a mortgage recording tax when a loan is recorded. On one- to three-family homes and condos the borrower’s share is about 1.8% of a loan under $500,000 and 1.925% at $500,000 or more. On commercial property and buildings of four or more units it is 2.8% at $500,000 or more. Outside the city the rate is lower and varies by county.

On a New York City sale the seller customarily pays the city transfer tax, 1% of the price up to $500,000 and 1.425% above that on one- to three-family homes and condos, and 1.425% or 2.625% on other property. The seller also pays the state transfer tax of 0.4%, which rises to 0.65% on homes of $3 million or more and on other property of $2 million or more. Buyers of one- to three-family homes and condos at $1 million or more pay the mansion tax, starting at 1%.

A DSCR loan is approved on the debt service coverage ratio: the rent divided by the full monthly payment. We prefer 1.0 or higher. Strong borrowers can qualify below 1.0 with lower leverage, and a no-DSCR program exists at a higher rate.

New York City’s Local Law 18 allows a short-term rental only when the host lives in the home, is present during the stay, has registered with the Mayor’s Office of Special Enforcement, and hosts no more than two guests. Renting out a whole house or apartment for less than 30 days is not allowed, so investor-owned property in the city is underwritten on long-term rent. Towns on Long Island and in Westchester set their own rules, and many require a permit or limit short stays.

Many apartment buildings of six or more units built before 1974 are rent stabilized, and since 2019 state law has made it very hard to deregulate an apartment or raise the rent for improvements. Good Cause Eviction, in effect in New York City since 2024, limits rent increases and evictions in most market-rate rentals. Exemptions include owners of 10 or fewer units statewide, buildings first occupied on or after January 1, 2009, and units renting above 245% of fair market rent.

Paint in New York City buildings built before 1960 is presumed to contain lead. Local Law 1 sets safe work practices and extra duties when a child under six lives in a unit, and Local Law 31 requires an XRF lead paint test in rental units of pre-1960 buildings, including rentals in one- and two-family homes.

New York City taxes one- to three-family homes as Class 1, where assessed value can rise no more than 6% a year and 20% over five years, and taxes buildings of four or more units, condos and co-ops as Class 2. A recent purchase can be assessed well below its price, so budget with the actual tax bill, not an estimate.

Yes, through our rental loan programs.

Fix and flip loans average up to 21 days and can close in about 7 days when title and insurance are ready. Rental and DSCR loans take about 30 days, appraisal included.

In New York, the buyer, the seller and the lender each have an attorney, and a title company insures the title. Have your attorney chosen when you apply.

The minimum is $75,000. The maximum is more than $10 million.

From 6 months to 30 years. Fix and flip loans are 6 to 24 months with interest-only payments. Rental loans are fixed for 5 to 30 years.

Not on fix and flip loans. Rental loans come with a 3-year or 5-year prepayment penalty, the 5-year usually priced about 0.25 to 0.5% lower, or with no penalty at a higher rate.