Hard money lender in Harrisburg, PA.

I am a hard money lender in Harrisburg, and the building that defines this city for an investor is the brick rowhouse: two or three stories, a shared party wall on each side, a narrow lot that runs back to an alley, and a century of other owners' decisions hidden behind the plaster. Harrisburg has thousands of them, from restored Victorians a few blocks from the Capitol to tired interior rows on the east side that have not seen a contractor in decades.

Prices here sit low enough that a full renovation is still a small loan, which is what draws flippers and buy and hold investors from outside the region. The other thing that sets the city apart is the river. Harrisburg runs along the east bank of the Susquehanna, and some of its most attractive blocks are also the ones closest to the water. That fact belongs in the underwrite from the first conversation, and I explain why below.

As a private money lender, I read the file myself and sign the term sheet myself, so you get a direct answer with the reasoning behind it. The rest of this page walks through the neighborhoods investors work in, what actually trades, and how fix and flip loans in Harrisburg, DSCR loans in Harrisburg and new construction loans in Harrisburg are structured when the building is a hundred years old and the seller wants to close this month.

The everyday Harrisburg deal is the interior brick rowhouse bought as-is and renovated for resale or for rent. The cosmetic work is predictable. What is not predictable is the building's envelope: the flat or low-slope rear roof, the box gutters and downspouts that feed into an old shared drain, and the mortar on a back wall that has been weathering since before anyone in the house was born. I read those lines in the budget before the kitchen line.

Mechanicals come next. Plenty of these houses still have a boiler, old wiring in places nobody has opened, and a water service line that is older than the meter on it. A scope that only covers what you can see on a walkthrough is a scope that will grow, so I ask what the contractor plans to do if the walls come down and the wiring or the supply lines are worse than expected.

Rowhouse rentals held for the long run are the second large category. A renovated three-bedroom row near the Capitol complex, the hospitals or the colleges in the city has a renter pool that does not depend on one employer, and that is what makes a BRRRR here workable. The refinance is only as good as the rent and the appraisal, so I want both to be grounded in comparable leased rowhouses rather than an asking rent on a listing site.

There are also conversions and small multifamily: larger end units and corner buildings that were split into apartments decades ago, sometimes with a storefront on the ground floor. These need a clear answer on how many units the city recognizes before I treat the rent roll as real. Infill construction on a vacant lot exists here too, but it is a smaller share of what trades than the renovation of a building that is already standing.

Harrisburg sits on the river, and parts of the city fall inside a mapped flood hazard area on the federal flood maps. Shipoke and the blocks along Front Street and the riverfront are the obvious ones, and Paxton Creek, which runs through the middle of the city, has its own mapped floodplain. Whether a particular house is inside one of those zones is a question for the map and the address, not for the neighborhood name.

This matters to a lender for a simple reason. If a building sits in a high risk flood zone and carries a federally backed mortgage, the lender will require flood insurance. That premium lands in the monthly payment of whoever buys your finished flip, which narrows the buyer pool and can push the price they will pay down. On a hold, the premium is an operating expense, and a DSCR loan is sized on rent against expenses, so the same house supports less loan inside the zone than it would outside it.

My practical advice is to pull the flood zone determination for the exact address before your contract becomes firm, and to get a real flood insurance quote, not a guess, while you can still renegotiate or walk. An elevation certificate can change the quote meaningfully, so ask whether one already exists for the property. The city takes part in the federal program that can lower premiums for owners inside its floodplain, which helps, but it does not make the line disappear.

None of this rules out a riverfront deal. Some of the best restored houses in the city are on those blocks, and buyers keep choosing them. It means the flood line goes into the budget and the exit before the purchase, the same way the roof and the boiler do.

Fix and flip loans in Harrisburg combine the purchase and the renovation in one facility. The renovation money goes out in draws once each stage of work is complete and inspected, so the early draws usually follow the roof, the rear wall, the electrical and the plumbing rather than the paint. On a rowhouse that order is the right one anyway, because a finished interior under a leaking rear roof is not finished.

I set the after-repair value from renovated rowhouses on the same block or the ones around it, since a restored Midtown row and an untouched Allison Hill row can be a short walk apart and nowhere near each other in value. The written term sheet comes back in 24 to 48 hours and the loan closes in 5 to 10 days subject to title. Pricing is set per deal and stated in the term sheet, and on a riverfront address I want the flood zone answer in the file before closing.

How fix and flip loans work

DSCR loans in Harrisburg are sized on the rent the property produces, not on your personal income, so tax returns and W2s stay out of the file. What I need is the lease, a rent roll if there is more than one unit, and enough history to show the tenant is real and paying. On a single rowhouse that is usually a short list.

The expense side gets equal attention. Taxes, insurance and, where it applies, flood insurance all come out of the rent before the loan is sized, so a riverfront row and an identical one six blocks inland are two different loans. DSCR loans close in 14 to 21 days, and they suit renovated rowhouses that are already leased as well as the refinance at the end of a BRRRR. Pricing is set per deal and stated in the term sheet.

How DSCR loans work

New construction loans in Harrisburg fund the land and the vertical build in one facility, starting at $150K and running to $1M+. In this city that usually means a new rowhouse or a small group of townhouses on an infill lot, or a gut rebuild behind a facade that has to stay.

Contractor bids are reviewed before the loan closes. I want a line-item budget, a schedule that matches it, and some evidence the builder has worked on a narrow lot between two existing party walls, because protecting the neighbors' walls is part of the cost. Draws follow the schedule of values as work is inspected. If the lot sits in a mapped flood zone, the design has to answer that before I count the finished value. These close in 10 to 14 days once the file is complete.

How construction loans work

A Harrisburg BRRRR starts with a bridge loan. You buy a rowhouse that needs work, fund the purchase and the renovation with me, lease it, and then refinance into a DSCR loan from the same lender once a tenant is in place. Because I underwrote the bridge, the refinance is a review of numbers I already know rather than a new lender meeting the project cold.

The questions that decide the refinance belong at the start. What will the finished row rent for, based on leased comparables rather than hope? What will insurance cost, including flood coverage if the address calls for it? Does the rent cover those costs with room to spare? If those answers are solid before closing, the refinance is a formality. Pricing is set per deal and stated in the term sheet.

How the BRRRR bridge works

Before anything else on this one, I would want the flood zone determination for the address. Most of Midtown is inland, but its western edge runs to the river, and a buyer's lender will ask the same question at resale.

Being inside a historic district can change what you are allowed to do to the front of the building. Windows, doors and the facade may need approval, which affects both the budget and the timeline, so confirm the rules for the specific block before you set your scope.

If the sale comes in below plan, the hold is the fallback, and the rowhouse has to carry a DSCR loan on its rent. I would rather the deal work at a conservative resale number and leave you the upside.