Investor guide. Updated September 2026

How do you choose a hard money lender in Massachusetts?

Choose a hard money lender on four things in this order: certainty of closing (do they fund on their own terms and on the date they say), total cost (rate plus points plus fees plus how interest is charged on the rehab budget), draw speed, and how the loan behaves if the project runs long. Ask for a written term sheet, a sample closing statement, and two references from borrowers who closed in the last six months. In Massachusetts, also confirm they close through an attorney and are comfortable with your city's permitting timelines.

Eleven questions to ask before you sign a term sheet

Who is funding this loan? Their own balance sheet, a warehouse line, or a placed capital source. Any of the three can be fine; what matters is that they tell you and that the money is committed before closing.
What is the total cost on this exact deal? Rate, points, lender legal, processing, appraisal or BPO, draw fees, and whether interest accrues on the full loan or only on drawn funds.
What is the loan amount, not just the rate? Two lenders at the same rate can differ by $50,000 in proceeds because of different LTC and LTARV caps.
How long from a signed term sheet to funding? Ask for their median, not their best case.
How fast do draws fund? Request-to-wire in business days, and whether inspections can be photo-based.
What happens at maturity? Extension fee, how many extensions, and what the default rate is.
Is there a prepayment penalty or minimum interest?
What do you require from a first-time investor? Even if you are experienced, the answer tells you how the shop thinks.
Do you fund 5+ units, condos, mixed use, or ground up? If your next deal is one of those, you want the same relationship to work.
Who is my contact after closing? The person who sold you the loan or a servicing desk in another state.
Can I speak to two borrowers who closed with you in the last six months?

Red flags

Upfront fees before a term sheet, especially application or commitment fees over a few hundred dollars
A rate that is far below the market with no explanation of leverage or fees
No written term sheet, or a term sheet with blanks for the loan amount
Refusal to say where the capital comes from
Pressure to close in a name or entity that is not yours
No attorney involved in a Massachusetts closing

Direct lender versus capital advisory

A direct lender funds from one balance sheet with one credit box, which means fast answers and a hard no when your deal does not fit. A private lending and capital advisory firm like 316 Capital places your file with the institutional capital partner whose credit box fits it, which means a deal that is a decline at one source can close at another, and your next deal in a different product does not require a new search. The trade is that the advisory firm's fee is part of the cost; the value is in the loan amount, the fit and the file management. Ask either type the same eleven questions.

How to compare two term sheets

Put both on one page with these lines: loan amount at closing, rehab holdback, rate, how interest is charged on the holdback, points, itemized fees, term, extension terms, prepayment, and draw turnaround. Then compute total cost for your realistic hold period, not the full term. A sheet with a 0.5% lower rate but interest charged on the full loan from day one usually loses to a sheet with interest on drawn funds only when the rehab is large. A sheet with $40,000 more in proceeds at a slightly higher rate usually wins if that $40,000 is the difference between doing the deal and not.

Massachusetts specifics

Attorney closings and lender's title insurance are standard; a lender that is surprised by that is not active here.
Ask about their experience with Boston, Worcester, Lynn, Brockton and other cities where permitting can add months. Lenders active in those markets underwrite realistic timelines.
Condominium projects need a master deed and condominium trust; see the condo guide below.
Many Massachusetts investors work across the border in New Hampshire and Rhode Island. Confirm the lender covers all three.

About 316 Capital

316 Capital is a Boston-based private lending and capital advisory firm arranging fix and flip, bridge, ground up construction and DSCR rental financing for real estate investors in 44 states and Washington DC through institutional capital partners. Initial pricing is free, with no credit pull, and every quote comes as a written term sheet with the loan amount and every fee on it.

Price your deal, no cost, no credit pull

Send the address, purchase price, budget and target loan amount. One point of contact from pricing through closing.

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Common questions

Is a hard money broker worth the fee?

When the placement produces a larger loan, a better fit for the project, or a close that a single lender could not deliver, yes. When you have a direct lender who funds your exact deal type reliably at market terms, it may not be. Compare the term sheets on total cost and proceeds, not on the label.

How do I check if a hard money lender is legitimate?

Ask for the written term sheet, the name of the closing attorney, and two recent borrower references. Search the entity name in the state business registry and the registry of deeds for recorded mortgages. Legitimate lenders have a paper trail of closed loans.

Should I pick the lender with the lowest rate?

Pick the lender with the lowest total cost for your realistic hold period and the highest certainty of closing. Rate is one of six or seven inputs to total cost and rarely the largest one on a short hold.

Does a hard money lender need to be licensed in Massachusetts?

Business-purpose loans to entities are generally exempt from consumer mortgage licensing, which is why most investor lenders are not licensed as mortgage lenders. What matters more is a track record of closed loans and an attorney-run closing process.

Can I use the same lender for fix and flip and the DSCR refinance?

With a capital advisory firm, usually yes, because the two loans are placed with different partners under one relationship. With a direct lender, only if they offer both products.

316 Capital is a private lending and capital advisory firm. We arrange business-purpose real estate financing through institutional capital partners; loans are not available for owner-occupied primary residences. Figures on this page are typical market ranges as of September 2026 and are not an offer or commitment. Every quote is transaction-specific and subject to underwriting. Contact info@316cap.com or +1 (617) 546-4817.