From the BiggerPockets Blog

 BiggerPockets Blog »

Jump to Forum View All

Click a category below to view different forum categories.


General Info

BiggerPockets Q&A, Site Questions, & Announcements

1522 topics, 14443 posts — Last Post 04/23/14, 05:38PM

BiggerPockets Exclusive PRO Area

118 topics, 844 posts — Last Post 04/23/14, 08:28AM

New Member Introductions

10977 topics, 86489 posts — Last Post 04/23/14, 05:43PM

Real Estate Success Stories

398 topics, 6196 posts — Last Post 04/23/14, 05:41PM

General Real Estate

General Real Estate

Buying & Selling Real Estate

5989 topics, 47193 posts — Last Post 04/23/14, 05:40PM


649 topics, 5857 posts — Last Post 04/23/14, 02:47PM

Get Foreclosure Help - Help Stop Foreclosure Forum

316 topics, 2557 posts — Last Post 04/21/14, 03:59PM

Home Owner Association (HOA) Issues & Problems Forum

238 topics, 1611 posts — Last Post 04/23/14, 04:02AM

Do it Yourself

658 topics, 6316 posts — Last Post 04/23/14, 09:50AM

Reviews & Feedback

Real Estate Deal Analysis and Advice

3706 topics, 29719 posts — Last Post 04/23/14, 05:23PM

Real Estate Guru, Book & Course Reviews and Discussions

1139 topics, 11598 posts — Last Post 04/23/14, 02:31PM

Ask About A Real Estate Company

743 topics, 7344 posts — Last Post 04/22/14, 11:25PM

Real Estate Investing

Real Estate Strategies


5633 topics, 43934 posts — Last Post 04/23/14, 05:34PM

Rehabbing and House Flipping

3351 topics, 31097 posts — Last Post 04/23/14, 02:09PM

Real Estate Development & New Home Construction

554 topics, 4694 posts — Last Post 04/22/14, 09:17PM

Innovative Strategies

705 topics, 6044 posts — Last Post 04/22/14, 04:06PM

Tax Liens, Notes, Paper, & Cash Flows Discussion

867 topics, 6692 posts — Last Post 04/22/14, 08:22PM

Rent to Own a.k.a. Lease Purchase, Lease Options

698 topics, 4926 posts — Last Post 04/23/14, 01:33PM

1031 Exchanges

143 topics, 1062 posts — Last Post 04/22/14, 03:21PM

Foreclosure Investing

General Foreclosure & Pre-Foreclosure Forums

1691 topics, 11313 posts — Last Post 04/22/14, 09:26PM

HUD, VA, and Tax Sales

416 topics, 3103 posts — Last Post 04/23/14, 02:29PM


1217 topics, 10595 posts — Last Post 04/23/14, 09:23AM

Short Sales

1538 topics, 13139 posts — Last Post 04/22/14, 01:38PM

Landlord & Tenant Forums

Landlord & Rental Property Questions

7246 topics, 71131 posts — Last Post 04/23/14, 05:41PM

Mobile Homes & Mobile Home Park Investing

639 topics, 5144 posts — Last Post 04/23/14, 07:57AM

Investor Basics

Starting Out

7727 topics, 60654 posts — Last Post 04/23/14, 02:30PM

Investor Psychology

431 topics, 6107 posts — Last Post 04/20/14, 06:04AM

General Real Estate Investing

4727 topics, 37315 posts — Last Post 04/23/14, 02:57PM

Real Estate Investor Marketing

1738 topics, 14146 posts — Last Post 04/23/14, 03:15PM

Commercial Real Estate

Commercial Real Estate Investing Forum

1412 topics, 9004 posts — Last Post 04/23/14, 02:19PM

Multi-Family and Apartment Investing

1123 topics, 9381 posts — Last Post 04/23/14, 04:46PM

The Business of Real Estate

Real Estate Technology and the Internet

Real Estate Technology, Social Media & Blogging

644 topics, 4911 posts — Last Post 04/23/14, 04:03PM

Business Basics

Goals, Business Plans & Entities

833 topics, 7573 posts — Last Post 04/23/14, 05:37PM

Real Estate Finance & Legal

Financial, Tax, and Legal

Tax, Legal Issues, Contracts, Self-Directed IRA

2802 topics, 20135 posts — Last Post 04/23/14, 04:45PM

Property Insurance

311 topics, 2057 posts — Last Post 04/23/14, 01:20PM

Personal Finance Discussion

330 topics, 2754 posts — Last Post 04/22/14, 12:06PM

Loans, Mortgages, Credit Lines

Private & Conventional Lending Discussion

2852 topics, 19844 posts — Last Post 04/23/14, 05:05PM

Creative Real Estate Financing

1220 topics, 8855 posts — Last Post 04/23/14, 05:22PM

Crowdfunding Real Estate

35 topics, 463 posts — Last Post 04/19/14, 06:24PM

Real Estate Professionals

Real Estate Professionals

Real Estate Agents

1217 topics, 8024 posts — Last Post 04/23/14, 08:23AM

Bankers, Lenders, and Mortgage Brokers

442 topics, 1929 posts — Last Post 04/22/14, 11:03AM


269 topics, 1690 posts — Last Post 04/22/14, 07:33AM

Local Real Estate

Local Real Estate

Local Real Estate Networking & Recommendations

2015 topics, 11749 posts — Last Post 04/23/14, 05:15PM

Americans & International Real Estate

162 topics, 568 posts — Last Post 04/14/14, 11:19AM

Foreigners Buying in the USA

62 topics, 409 posts — Last Post 04/10/14, 06:27AM

Canadian Real Estate

65 topics, 439 posts — Last Post 04/22/14, 09:27AM


Real Estate Marketplace

Real Estate Marketplace

15080 topics, 54118 posts — Last Post 04/23/14, 05:37PM

Real Estate Events and Happenings

168 topics, 2598 posts — Last Post 04/23/14, 05:03PM


Off Topic


2907 topics, 32441 posts — Last Post 04/23/14, 11:24AM

Housing News & Real Estate Market

920 topics, 8391 posts — Last Post 04/23/14, 02:43PM

BiggerPockets Real Estate Investing Summit

97 topics, 1752 posts — Last Post 04/23/14, 04:51AM

BiggerPockets Resources

Forums » General Real Estate Investing » Using Hard Money

Using Hard Money

10 posts by 8 users


Real Estate Investor · Fort Worth, Texas

What is everyone's opinion on using hard money to invest in real estate?

I know you are risking a lot less money (and in turn you have more cash to do more deals simultaneously) and it drastically raises your ROI, but I just wanted to ge the BP world's opinion on it.

Hard Money Lender · Tyngsboro, Massachusetts

If you can get a better rate elsewhere, do so.

If you can't get a better deal elsewhere, or the timeframe doesn't allow for cheaper financing, then make sure the deal supports it before you commit.

And you're not really risking less money. You always sign a personal guarantee on a hard money loan, so if you default, and the foreclosure doesn't make the lender whole, they will go for a deficiency judgement.

You use the tool appropriate for the job at hand.

Small_small_logoAnn Bellamy, Buy Now, LLC
Telephone: 800-418-0081
Hard money lending in NH and MA, and for free networking in MA,

Hard Money Lender · Davidson, North Carolina

As always @annbellamy hits nail on head...

If a hard money allows you to move forward on a profitable investment after paying the lender, you should strongly consider it, understanding there is risk in the event of nonperformance. If you can keep 60 to 70% of the profit in the deal, vs. 100% of $0 profit because you were not able to do the deal, then hard money makes sense.

Look at hard money as the middle ground between bank financing and equity. Equity wants 50% when all is said and done (and will also share in the downside if that occurs). The bank will be cheaper, but much harder to get. So see hard money as a tool that allows you to leverage your limited capital and increase your ROI significantly.

And by all means, develop your own sources of private money over time.

Rehabber · Riverside, California

As a hard money lender, we always tell people to max out conventional financing first. After that, we often less expensive, and less hassle, than having an equity partner. Instead of worrying about raising money, you focus on deals.

Small_tng_webAaron Norris, The Norris Group Hard Money
E-Mail: [email protected]
Telephone: 951-780-5856
The Norris Group l

Real Estate Investor · Ellicott City, Maryland

Completely agree with Ann (and Bill)...

If you have other -- less expensive -- options, use those first. If you don't have other options, and you're confident that you can still earn a profit despite the HML fees/costs, then there's absolutely nothing wrong with HML.

A lot of successful investors got their start using hard money, and I know some very successful investors who are STILL using hard money today (though at rates a bit better than typical hard money), because it supports their business and growth model and is their best financing option given their particular situation.

Personally, if I were to go through all my cash and private money, I'd happily use hard money if I could still make money a deal. And I wouldn't be surprised if I do at some point in the future.

Small_lishproplogoJ Scott, Lish Properties, LLC
E-Mail: [email protected]
Telephone: 770-906-6358

Real Estate Lender · Salt Lake City, Utah

I know a retired r.e. investor who has done over 400 flips in his career in Southern CA. He said he was doing 4 homes at a time and couldn't have done it without using hard money. He never used one bank loan because he had a need for speed. He's now retired and a millionaire. He says, "your most expensive money is your own money, your second most expensive money is your partner's or family member's money..." Notice he doesn't say hard money is your most expensive money?

Foreclosure Specialist · Fort Worth, Texas

if you are going to buy fix and rent the house and it isn't in condition to qualify for conventional financing, the best way to buy is using a hard money loan that converts to a conventional loan once the rehab is done. not all hard money loans do that so shop around. i know sherman bridge does in the Texas market.

however if you are flipping a property i feel it's best to max out the ARV as high as you can get approved for when deciding to buy, hence increasing your potential profit spread. always make sure you have all your ducks in a row and all of your contractors set and ready to go the day of closing. the sold comps in your area should have low days on market. time is money...especially when using hard money! if you make sure all of that is done...hard money is a great way to leverage your available cash.


Everybody above me is correct.

In my case I'm using hard money as my bridge to greener pastures (better financing). Without HML's I wouldn't have been able to build my track record as fast as I would have wanted to. Because of the track record my hardmoney deals provided me Im starting to attract private money. It's all a process.

Will I use HML when my private money dries up? - everytime!

Will I have to be extra careful about my numbers to make sure I come out green on the other side? - not anymore than I do with my other deals.

Will I always be on the search for cheaper money? - yup!

In the end use it, its a tool and HMLs wouldn't be in business if your competitors didn't maximize their use.

Rehabber · Riverside, California

Nice website @Glenn Espinosa

Small_tng_webAaron Norris, The Norris Group Hard Money
E-Mail: [email protected]
Telephone: 951-780-5856
The Norris Group l


Thanks @Aaron Norris! We're trying hard to build a strong brand over here in my neck of the woods. Respectable Hard money lenders like yourself (and others who posted in this thread) are helping us do that so its a win-win for everyone involved.

Sign up