Hard money lender

Buying & Selling Real Estate
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Hard money lender

Allen Zhu
Rental Property Investor · Member since 2021 · 52 posts · 29 votes

Is hard money lender worth it for first time investors? The company I'm looking at changes 10% just wanna get some info! 

Thanks in advance!

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Tyler Reed
Member since 2025 · 35 posts · 14 votes
1y
Quote from @Allen Zhu:

Is hard money lender worth it for first time investors? The company I'm looking at changes 10% just wanna get some info! 

Thanks in advance!


Not all hard money lenders are created equal! But they can be massively impactful, especially as a guide rail for newer investors who have less experience. Worth using, but also worth dedicating some time to qualify the right one to work with (I work with a Bigger Pockets preferred lender, so I am not impartial!)

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  • Ericka Parrott
    Residential Real Estate Agent · Atlanta, GA · Member since 2009 · 381 posts · 134 votes
    1y

    Hi Allen, there are plenty of hard money/private money lenders here on BP, just take your time and speak with several of them to understand all the fees and requirements.

    0Reply
  • Alexander Pagano
    Lender · Philadelphia, PA · Member since 2025 · 7 posts · 3 votes
    1y

    Hey Allen, it all depends on your goals. These types of loans are meant to be quick in and quick out. 10% does not seem out of ordinary for a fix & flip loan. If you are looking to buy, renovate, and flip/or refi it is imperative that you have a team that is efficient so you can get it done before the loan matures/balloons. These loans usually only have lengths on average from 6-12 months. Once the loan matures, the interest rate could go even higher and you can actually start losing equity in the deal. If you want to share some specifics on what you are looking to exactly do, I am happy to help answer any questions. 

    1Reply
    • Allen Zhu
      OP
      Rental Property Investor · Member since 2021 · 52 posts · 29 votes
      1y

      @Alexander Pagano I'm thinking about a company called 212 Loans based out of Texas

      0Reply
  • Tyler Reed
    Member since 2025 · 35 posts · 14 votes
    1y
    Quote from @Allen Zhu:

    Is hard money lender worth it for first time investors? The company I'm looking at changes 10% just wanna get some info! 

    Thanks in advance!


    Not all hard money lenders are created equal! But they can be massively impactful, especially as a guide rail for newer investors who have less experience. Worth using, but also worth dedicating some time to qualify the right one to work with (I work with a Bigger Pockets preferred lender, so I am not impartial!)

    1Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y
    Quote from @Allen Zhu:

    Is hard money lender worth it for first time investors? The company I'm looking at changes 10% just wanna get some info! 

    Thanks in advance!


     10% is a great rate. A little of something is better than a lot of nothing, so if the deal works then I would consider it, especially if no other options

    7e investments53 Reviews
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    • Allen Zhu
      OP
      Rental Property Investor · Member since 2021 · 52 posts · 29 votes
      1y

      @Chris Seveney looking to refinance out to a dscr loan. For a rental property . Currently looking at this company called 212 loans based out of Texas 

      1Reply
  • Alexander Pagano
    Lender · Philadelphia, PA · Member since 2025 · 7 posts · 3 votes
    1y

    @Allen Zhu Copy that. I am not familiar with them. From a loan standpoint, I would run the DSCR numbers/scenario first to make sure your numbers make sense post rehab. If you need any help running the numbers, feel free to reach out to me.

    0Reply
  • Zach Edelman
    Lender · New York, NY · Member since 2022 · 1k+ posts · 1k+ votes
    1y

    Hard Money Lenders - from what I've seen, reflect the lack of experience more in the leverage than the rate. What leverage are you being offered?

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  • Ben FernandezBusiness Member
    Realtor · Lancaster, PA · Member since 2025 · 169 posts · 97 votes
    1y

    More of the terms are necessary, in order to provide feedback on your partnership.

    As far as the interest rate, 10% is not bad. However, there are likely multiple more terms involved in your partnership with this hard money lender.

    [email protected]717-945-7040
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  • Ryan KellyBusiness Member
    Real Estate Broker · Austin, TX · Member since 2018 · 1k+ posts · 1k+ votes
    1y

    @Allen Zhu if you are refinancing out of a DSCR loan, you don't typically refinance into short-term hard money loans. If you are in an LLC and looking for better rates and longer amortization terms, I recommend networking with local and community banks.

    [email protected]512-674-5478
    Ryan Kelly Group - Keller Williams5112 Reviews
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  • Thomas McPherson
    Lender · Member since 2024 · 60 posts · 26 votes
    1y
    Quote from @Allen Zhu:

    Is hard money lender worth it for first time investors? The company I'm looking at changes 10% just wanna get some info! 

    Thanks in advance!


     They absolutely can be a good private lender with your best interests in minds can jumpstart your RE career.  On the other hand, a greedy, shadier lender can set you back.  Trust your gut and ideally go off of a recommendation AND properly vet the lender.  

    Hope this helps, 

    Thomas

    0Reply
  • Drago Stanimirovic
    New to Real Estate · Miami, FL · Member since 2024 · 1k+ posts · 474 votes
    1y

    Hi Allen,

    Hard money loans can be a great tool for first-time investors if used correctly. They offer fast funding and flexible terms, making them ideal for fix-and-flip or BRRRR strategies. The key is making sure the deal's numbers work, your profit should justify the higher cost of capital. If you're buying a rental, a DSCR loan might be a better long-term option. If you're flipping, ensure you have a solid exit plan. Need help running the numbers or exploring better rates? Let me know!

    Drago

    0Reply
  • Kyle DeutschmannPro Member
    Investor · Washington, DC · Member since 2017 · 428 posts · 205 votes
    1y
    Quote from @Allen Zhu:

    Is hard money lender worth it for first time investors? The company I'm looking at changes 10% just wanna get some info! 

    Thanks in advance!


    Hi Allen, when I got started, I used a 3% down conventional loan to buy my first property. I house hacked then rented it out after a year. I'd recommend this strategy for a new investor vs. doing a HML on your first deal.

    If house-hacking is out of the question/you already own a primary at the very least, then that sounds like a pretty solid option/interest rate (although I might be able to beat that...). HMLs are a higher risk loan product that are meant for experienced investors although many will still lend to new investors. Typically has a balloon payment due in 6-12 months, so you need to ensure you're ready to get it rehabbed and sold (or refinanced) quickly. Do you plan to flip it or hold as a rental? 

    [email protected]
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  • Ryan BlakePro Member
    Lender · TX · Member since 2018 · 936 posts · 713 votes
    1y

    @Allen Zhu I think looking at rate only is not a good position. Look at what you need first, then look at the rates. For instance a lender that requires a 15% down payment will have a lower rate, because for them there is less risk. But based on your prior posts it looks like you are doing the BRRRR method and you would probably rather have a higher LTC. There are companies out there that will offer 100% LTC but they will have a rate closer to 12%+. For the BRRRR method, this would likely be more advantageous to you. It keeps more money in your pocket and if you refinance within 2 - 3 months, the interest rate will not make a big difference. For instance, a 10% interest rate on a $200,000 loan would be a payment of $1,660 / month where as a 12% interest rate on a loan would be $2,000 / month. There is a $340 difference but if you had to put down a 15% down payment that means you would be putting down $30,000 more at closing which would be left in the property unless you held it long enough to do a cash out refinance ($200,000 x 15% = $30,000). So it really comes down to what is the best strategy for you.

    [email protected]214-420-7324
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  • Obed Calixte
    Real Estate Agent · St Petersburg, FL · Member since 2019 · 321 posts · 182 votes
    1y

    what are you aiming to do with the loan? 

    If it's the same 212 loan that I have some high level knowledge on, they offer fix and flip loans and are generally associated with a specific wholesaling firm. 

    Are you purchasing a fix and flip property and looking for a hard money loan? 

    Or do you already have a property and looking to refinance into a long term loan? If that is your plan, there are plenty of products and lenders out there than can help. 

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