BiggerPockets Podcast 009: Using Hard Money Lenders to Grow Your Business with Ann Bellamy

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Hard Money Lending is a fundamental tool for many real estate investors, but is often misunderstood and difficult to find. So today on the BiggerPockets Podcast, we sit down with hard money lender Ann Bellamy to discuss how to find and successfully use hard money to build and grow your real estate investing business. This show has an immense amount of solid, actionable content that you can use immediately, so definitely take the time to listen!

Before we get to the show, thank you again to everyone who has subscribed in iTunes to help make us one of the top business podcasts in all of iTunes! We’re up to 129 5-Star Reviews so far! Every subscription in iTunes and every review helps us reach more people – so thank you!

Read the Transcript

Transcript of BiggerPockets Podcast Episode 9 with Ann Bellamy

Listen to The Show on iTunes

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Listen to the Podcast Here

In Today’s Hard Money Podcast, We Cover:

  • What hard money is, when to use it, and when NOT to use it.
  • Why Rehab properties in rural areas is a bad idea
  • Exit strategies and the new Real Estate Mini Bubble.
  • Typical hard money rates and fees – and how you can lower them.
  • Ann’s (and Brandon’s) first mistakes with Hard Money.
  • The best place to find Hard Money Lenders (hint: try here)
  • How to get your hard money loan proposals accepted every time.
  • Which comes first: finding the hard money lender or the deal?
  • Starting a local ethical real estate club to build your brand.
  • How to become a Hard Money Lender.
  • And much, much more!

Links From the Hard Money Show:

Books Mentioned in the Show

Tweetable Topics:

“The first and most important exit strategy is having one.” (Tweet This!)

“Hard money is not a mafia guy with a baseball bat – it’s a tool for growing your business.” (Tweet This!)

“If hard money makes a deal unprofitable – you shouldn’t be doing the deal.” (Tweet This!)

“Don’t misrepresent yourself. It’s okay to be new at something… just say so!” (Tweet This!)

“In this day and age – you need to be able to communicate electronically.” (Tweet This!)

“Both persistence and the ability to adapt are required for success.” (Tweet This)

About Ann

Ann Bellamy is a real estate investor and Hard Money Lender in Southern New Hampshire, and has been involved in the leadership of several real estate investing groups in Massachusetts and New Hampshire. She provides short term and construction funding, or hard money loans, to real estate investors in these states and networks extensively in MA and NH with investors of all types.

Ann’s BiggerPockets Profile

What do you think? Do you have any questions or comments for Ann or about the show? Leave your thoughts below!

About Author

Thanks for checking out the BiggerPockets Real Estate Investing & Wealth Building Podcast. Hosts Joshua Dorkin & Brandon Turner strive to bring top-notch educational content and interviews to our listeners -- without the non-stop pitch prevalent around the industry. With over 180,000 listeners per show, the BiggerPockets Podcast has become the biggest real estate podcast in the world. But don’t take our word for it. We’re the top-rated and reviewed real estate show on iTunes — check it out, read the reviews on iTunes, and get busy listening and learning!


  1. Great article, I have never used hard money, too scary.

    One of my mentors eventually cashed out of RE just before this most recent bubble.
    Now besides other things he is a hard money lender. He told me hard money lending is a loan to own program where sometimes he gets renovated properties handed to him for 50 cents on a dollar. As I said from the borrowers perspective this is scary.

    • Hey Dennis –
      I think that Ann does a phenomenal job of schooling us all on the topic of Hard Money. It can certainly be scary if you don’t have a plan . . . we really dig into why that’s important in the interview. I hope everyone listens to this one.

  2. Dennis, Hard Money should not be “loan to own”. Reputable lenders view foreclosure as a failure, not a goal. Unfortunately, not all individual lenders act this way, so it is important to check out your lender with other people who have done business with him or her. Ask around your local investor groups, and you can even post on Bigger Pockets and ask about a lender. Lots of investors will chime in and give you their experience if they have done business with them.

    One important note: There is a big difference between: “I hope you mess up so I can take your property” and “If I have to take the property back I am comfortable that I can get my money back”. The former is loan to own. The latter is a lender covering his assets.

    • Ann, you are spot on. I own Lavallette Capital, a hard money lender based in NJ, and the last thing I’m looking for is to take over or foreclose on a property. We’re in business to lend and make a return on our capital, not profit at the expense of the borrower by taking over properties. Unfortunately, there definitely are loan-to-own lenders out there, and that gives the whole industry a bad rap. The best advise is as you said, do some due diligence on the lender and speak to other borrowers that have worked with your prospective lender, so you can gain a comfort level with how they operate.

  3. Great Podcast Anne and BP. What I appreciate the most compared to other BP material is warning of the legal aspects of PML. In my state of KS if you engage without a license and surety bond it is a felony and can put you in prison. I think I will ask a PML to see their license and insurance before I use them. My Office of the State Banker Commissioner has the laws, as noted under license exceptions that an individual is allowed to fund their own property up to 5 and owner finance that is all!

    I have a friend as you did starting out with cash sitting in a bank drawing zero interest. Only way I can think around this is to have them buy the house with cash, hire my construction company as needed, then owner finance to flip or rent as an exit strategies. Your thoughts?

    Heading to my first landlord association tonight, also signed up for itunes. 🙂

    Here is where I found the info in my state:

    • Terry, most states have residential lending requirements. However, most private lenders stay with commercial transactions, which does not require a license in many areas.

      Redevelopers fixing houses and reselling as a business are our customers, and in the states I do business in, lending to companies in the pursuit of a commercial loan does not fall under residential guidelines, according to my attornies. Similar to a developer building single family houses who applies for a commercial loan. He is not a residential borrower either.

      So your friend sitting with cash should find a real estate attorney who does lots of private lending transactions and talk to that attorney about local lending laws. Note that I said lots of private lending transactions – many real estate attorneys are not versed on lending laws, because they only deal with institutions such as banks, which have all the appropriate licensing in place.

      • Ann, my state must be one of the tough ones. From what I can tell unless you’re a bank, or an approved business type that is regulated, with an office open to the public, you’re going to need a license and surety bond. If you don’t have a public office from what I understand the insurance is higher. I will check with a PML attorney per your advice.

        I see all these regulations on PMLs getting stiffer since some in the past have acted as loan sharks taking advantage of people that are not as savvy or knowledgeable, and the banks are regulated no fair for the PLM not to be. What’s your take on this? The Safe act, Dodd Frank act, Jobs act, Obama, etc, and some of the other regulations like DFI, Department of Financial Institutions and the SEC, perhaps you are? Are you Surety bonded? Is it expensive, along with other regulations, to be a HML? I am sure that varies per state.

        • Attorneys, not attornies. Sorry.

          And yes, regulations get more complex all the time. Each state passes it’s own version of the SAFE act, so that’s why it’s so important to find an attorney knowledgeable in private lending. Another reason we stay with commercial transactions.

  4. Excellent and Informative podcast (as usual). I had wondered about the use of HML and assumed it was mostly for rehab/resell properties. It was reassuring to hear about the potential to refi as an exit strategy and that it’s ok to be a ‘Newbie’. Great information about making a presentation of the potential property too. I’m going to put a few together just to practice so I’m ready when the time comes.
    BTW Ann, I made it to the last Black Diamond event in Waltham, simply great! I am going to try and make the Worcester launch as well.

    • Thanks, Kris, for your kind words, and for attending Black Diamond. We’re exciting about our launch of our new location so we appreciate your support. Our speaker will be talking about finding deals through the bankruptcy system. See you Tuesday!

  5. Good info. It helps to know more about the hard money process to understand some of my clients a bit better. I have an appraisal on my desk right now where the Borrower is doing a $400K hard money loan. His goal is to rehab the house and then refinance it as quickly as possible. This is right in line with what you mentioned about the need for an exit strategy. That seems very key in hard money. I’m curious if you require both an “as is” appraisal and an “as improved.” It seems the typical scenario is an “as is” but then only an addendum for “as improved” (instead of a full appraisal). I wonder if there are any official standards or if it’s just up to each individual lender?

    • Ryan, we seldom use appraisals at all. They take too long, usually, and I’ve seen some “interesting” use of comps. Most of the national hard money guys require appraisals because they don’t know the area.

      We work mostly off of ARV – After Repaired Value – which would correlate to “As Improved”.

      There are no standards: each lender sets their own criteria for geography, LTV, rates, terms, points, etc. What one lender specializes in, another won’t touch. Your best bet is to find lenders local to the property.

      • Interesting. Thanks. If you know the market, I can see that working well. At the same time when the property gets rehabbed and the ARV was wrong, that could be an issue for exiting the loan. It’s like you say though, you really have to know the market when making these loans, and it sounds like you have a great system in place to assess value. Thanks again.

  6. Excellent, Ann & BP, thank you for a very informative podcast. I used hard money my very first (and at this point only) fix and flip and found my HML not only quick and efficient but extremely easy to work with. I was not nervous at all even though the money was expensive because I priced all that into my offer price and my exit strategy was solid so the lender was comfortable too even though it was my first time. All in all it was a great experience and I will do it again – provided I can find a property, which in CA is getting harder to do ;).

    Thanks again for the great podcast!

  7. Mark Colburn on


    Thank you very much for providing such great information and insight from your experience. A key take away for me was how you suggested presenting a deal to a hard money lender. I didn’t have a clue besides just calling and/or emailing with some details. Your suggestions on what to include and how to be as professional as possible were very helpful to me. Also your advice on trying to find a local HML first before a national one seemed like a great idea.

    Josh and Brandon,

    Thanks for another great podcast, as I find these both very informative and enjoyable to listen too.

    • Mark, hard money is much closer to commercial lending that to residential, in that we look at the deal, more than the person. Experience matters in both commercial and in hard money. In fact, all my loans are commercial, because we lend only to companies, not to people, and those companies are in the business of buy, selling and redeveloping real estate.

      So if you present well to a hard money lender, you will be partway towards understanding what a commercial lender is looking for if and when you are ready to move in that direction.

      Glad you found it helpful.

  8. Karin DiMauro on

    Great job, Ann! One big takeaway for me, too, was about the notion of a presentation. I’ve always been ready to answer questions and perhaps had a flier with some photos, basics and comps, but from now on I’ll have a polished packet.

    I’m wondering if you have any tips on how to do more than one flip at a time using hard money. It seems, with the monthly mortgage, that this wouldn’t be too feasible. Anything I might be missing?

    Thanks again. And Josh, when will the podcasts include video so we can see these alleged costumes? 😉

    (p.s. On an unrelated note, anyone know why my photo doesn’t appear when I post here? It shows up on the usual BP forums.)

    • Karin, it is true that having to make monthly payments limits the number of deals you can do at a time. It’s part of the skin-in-the-game, and from the lender’s perspective, it keeps the borrower focused on getting the project completed on a timely basis. If interest is accruing without being paid, it increases the payoff to the lender. Of course, I am speaking only from the side of protecting the lender’s position.

      From the borrower’s perspective, some lenders will allow payoff of the interest at the completion of the project and payoff of the loan. Usually this would be based on significant history of successfully completed loans with that lender. Once you have some history with a lender that you work well with, you can always ask if that would be possible, and what would be the additional costs to accrue rather than pay the interest monthly.

  9. Very good podcast. I am interested in hard money since I will be starting out with limited capital. So hard money loans are really only practical for flips right? I guess you wouldn’t want to take out a hard money loan on a small rental property because there would be no way you could pay the loan back in time if you’re just starting out. From what I understand a private money loan would be better for that sort of investment because you can pay the loan back over a longer period of time. Again, great show.


  10. I’m catching up on the podcasts and was happy to find this interview with Ann. It was a great episode and really provided helpful information, especially for those new to hard money loans.

    On a side note, I can tell you from first-hand experience that I have worked with Ann for our rehab loan and she is fantastic. She is patient, knowledgeable and very understanding!

  11. This was a great show Josh, Brandon and Ann!

    Ann, you mentioned exit strategies a couple times throughout the podcast and I’m wondering if you have any ‘preferred’ examples of exit strategies? Brandon told his tale of partnering up on a flip-gone-bad and he still holds the property as a rental unit to this day–would you expect a flipper to have something like that written into their initial presentation to you? What are some other examples that would reassure you as a lender on, say, a 6-month loan for a smaller rehab project?


  12. Understanding that I lend in NH and MA only, and that circumstances and lender requirements may be different in your area, the most common exit is to resell to an end buyer.

    So that requires that
    1. You make the correct choices in your rehab so that it appeals to the largest number of buyers
    2. You price it so it moves very quickly

    When a borrower sends me a package, if he says the ARV is 350K, and I think it’s 300K, then either:
    1. He’s trying to inflate the ARV to get a larger loan
    2. He’s wrong
    3. I’m wrong

    So I want to see that he’s going to understand his market and what buyers want, and has enough wiggle room to drop the price if both of us are wrong. Stuff happens. So the way he presents his ARV and his plan for the deal (what he’s going to do to the house and how he’s going to sell it) are important.

    If it’s a buy and hold from the beginning, he has to show me that he can get refi’d. Since commercial lenders don’t provide pre-approvals, that’s hard to do, so he needs a good credit score and good banking relationships.

    • Thanks so much Ann! I feel a bit silly–I didn’t realize “sell property” was itself an exit strategy, I figured that was pretty much a fundamental in the process of flipping!! I thought exit strategies were more alternatives to be used if it didn’t sell. That’s why I love BP and having great guests like yourself on the podcast…there’s so much specific terminology that I’m learning that will give me such a leg up come my first flip vs. learning it all on the fly. Thanks again!!

  13. Michael Maloney on


    Thank you so much for this. I have been looking into HML and have been scared to death. The information you have provided has made it much easier to see how this can be a good option for financing.


  14. I am a newer investor and am trying to venture into fix and flips and I have gotten a great deal locked up in Washington. Does anyone recommend a good hard money lender that lends in Washington?
    I have great credit, But not really collateral. I do have this deal locked up and the rehab should make a great profit.. Got it locked at $58,000 and ARV is about $156,000. And the repairs are about $40,000

    Any words for a newer investor trying to build my business..???

  15. Anne’s podcast was truly motivating! I was glad to learn there were other financing options, and also that hard money lending was not something to stay away from (like a plague) as I had read in other online articles.

    Thanks Anne for your expertise!

    Silvana G.

  16. This was a great episode, but one thing though. There are a lot of “hard money lenders” popping up, post bubble, claiming to provide unbelievable rates. I didn’t hear to much on how to protect yourself from these scammers, so I would like to offer my advice.

    1. Referrals: I would almost go to the measures of saying if you haven’t heard a trust source refer them don’t use them
    2. Nothing is free: no points, 100% ARV & 100%LTV, 6% interest, 5 yr financing, all loan types, no credit check, no monthly payments. just sounds a little to good to be true
    3. History: ask them what are some of their most recent transactions. not only will this inform you on what type of loans they are looking to give, it also lets you know if they are actively lending.

    Anyone can come up with a fancy name pop up a quick site with a google voice number and call them selves a reputable business, but its up to you to uncover the truth

    • Good suggestions, Delon, and you can avoid most of these issues by using a lender local to you. You can more easily check on them by asking at local meetings and working with lenders who come recommended by people you know.

  17. Julie Marquez

    This was an awesome show! I don’t plan on using hard money, but I love how detailed she explained everything and the process. It’s great to hear about it from the lender’s perspective, and I all the criteria that she likes to see. I loved that this show was very detailed and specific, and I recommend it to everyone to learn about this aspect of real estate. Thanks for sharing and helping out the BP community, Ann!

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