Frequently Asked Questions (FAQ)
For Real Estate Investors (Borrowers)
What types of loans do you offer?
We offer asset-backed, short-term hard money loans to real estate investors. These are ideal for fix-and-flip, BRRRR, rental repositioning, and bridge scenarios. Our typical loan covers both acquisition and renovation.
How fast can you close?
Deals can be funded in as little as 48–72 hours, provided the title is clear and the borrower documents are ready. All approvals are made in-house, with no bureaucratic delays.
What are your standard loan terms?
- Loan Amount: Typically $150K–$500K
- Interest Rate: 12–13%
- Term: 6 months with up to 3 built-in extensions (up to 15 months total)
- Points: 2–3% origination
- Payments: Interest-only, monthly
- LTV: Up to 75% of the as-is value
- Rehab Funding: Held in escrow and disbursed via draws
What types of properties do you lend on?
- Single-family fix & flips
- Small multi-family (2–4 units)
- Rental repositioning
- Value-add rehabs
- Bridge loans for investor purchases
How do construction draws work?
Rehab funds are held in escrow and released in staged draws after a walkthrough or receipt verification. You are still charged interest on the full loan amount, including escrowed rehab funds.
Do I need experience to get a loan?
While experience helps, we prioritize deal quality and borrower integrity. We work with both first-time investors and experienced flippers.
Do you require an appraisal?
No. We use internal valuations and comps. This speeds up the process and cuts costs for you.
Where do you lend?
We focus on Maryland, including:
Baltimore City & County, Anne Arundel, Harford, Howard, and surrounding areas.
Are there prepayment penalties?
No. You can pay off early without penalty, which helps reduce your overall interest expense.
Can I refinance with you?
Yes, we do cash-out and rate-term refinances for investors with equity in their properties.
What are the upfront costs?
At closing, you’ll typically pay:
- Origination points (2–3%)
- Title, recording, and insurance fees
- First month’s interest
- Any closing attorney costs
For Private Lenders (Individuals Lending to Free State Capital)
What exactly am I doing as a private lender?
Private lenders make secured loans to Free State Capital, LLC, not into a pooled fund. In return, you earn a fixed interest rate (typically 10% annually) on a 12-month note secured by a collateral assignment.
Is this an investment in a fund?
No. This is not a pooled fund or a security. This is a private loan directly to our company, with a note and security agreement in place. Your capital is tied to a secured, asset-backed lending operation.
How is my loan secured?
Your loan is secured by:
- A promissory note from Free State Capital
- A collateral assignment of one or more underlying mortgages
- Personal guarantees in some cases
- Optional UCC filings and insurance documentation if applicable
What is the minimum loan amount?
Typically $100,000, though we may accept smaller amounts depending on current demand and note availability.
What is the term of the loan?
Most lender notes are 12 months, with early repayment possible. We aim to redeploy funds quickly and can roll over or renew based on availability.
What return can I expect?
Lenders typically receive 10% annual interest, paid monthly or quarterly, depending on agreement terms.
When do I get paid?
Interest payments are made on a monthly basis or accrued and paid at maturity, based on your preference. You’ll receive ACH deposits directly to your bank account.
Is my principal protected?
All capital is secured by real estate notes and backed by physical property. While no investment is risk-free, Free State Capital maintains conservative LTV ratios and a 0% default track record to date.
What kind of reporting will I get?
We provide:
- A lender statement with each disbursement
- A loan summary detailing principal, interest, and maturity
- Optional documentation on underlying notes upon request
Can I lend using my IRA or 401(k)?
Yes. We accept self-directed IRA and 401(k) funds via qualified custodians. Many of our lenders use retirement accounts to earn fixed income with tax-deferred or tax-free growth.
Do I need to be accredited?
In most cases, yes. These private loan offerings are limited to accredited investors. We can help you determine eligibility during the onboarding process.
Why lend to Free State Capital instead of investing in a fund or stock market?
- Consistent monthly income
- Secured by real estate
- No market volatility
- Personalized service and relationship-based model
- You’re helping fuel real projects in your own community