hard money lenders
Member since 2021 · 7 posts · 9 votes
hard money lenders
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
6moOne recommendation is to research websites like National Private Lenders Association and American Association of Private Lenders. Both provide good information on understanding the private lending space.
7e investments53 Reviews
13 Replies
- 6moDevin PetersonBusiness MemberLender · Sarasota, FL · Member since 2022 · 2k+ posts · 675 votes
What in particular are you looking to learn more about hard money loans? Essentially, there are products used by and for investors to purchase and renovate investment properties. There are lots of different creative ways to use Hard Money products. What exact questions do you have?
ProAlpha Capital56 Reviews - Member since 2021 · 7 posts · 9 votes6mo
Im a small town investor, we don't have many options here. Im looking at a small multifamily that needs some small rehab and the rents are $200 below market. I know the area well but looking for someone to possible help with creative financing. Im in the perfect setup to grow my portfolio just don't have that many people or other experienced individuals to help me with that.
- Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes6mo
Quote from @Jacob Breytspraak:
Im a small town investor, we don't have many options here. Im looking at a small multifamily that needs some small rehab and the rents are $200 below market. I know the area well but looking for someone to possible help with creative financing. Im in the perfect setup to grow my portfolio just don't have that many people or other experienced individuals to help me with that.
Rents $200 below market on a small multifamily is actually a really attractive entry point because that upside is built in from day one. Once you complete the rehab and bring rents to market you're looking at a meaningfully different cash flow picture, and that improved NOI is what's going to make refinancing out of the hard money into a conventional or DSCR loan much cleaner down the road.
The piece I'd really focus on is getting your after repair value and your stabilized rent projections locked down before you approach any lender. Hard money lenders are going to underwrite heavily on those two numbers so the more airtight your case is going in the better your terms will be.
Here's the bigger picture though. If you execute this deal well it actually sets you up really nicely to scale. Once you stabilize and refinance you're potentially pulling equity back out to fund the next one. That's the BRRRR cycle and in a small market with limited competition and deep local knowledge.
- 6moErik EstradaBusiness MemberLender · Member since 2022 · 6k+ posts · 1k+ votes
Quote from @Jacob Breytspraak:
hey guys looking for information on hard money lenders? Been seeing people post and discuss but what to understand it more
Happy to connect!
LuxePrivate Investments LLC 572 Reviews - Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes6mo
One recommendation is to research websites like National Private Lenders Association and American Association of Private Lenders. Both provide good information on understanding the private lending space.
7e investments53 Reviews - Lender · Chicago, IL · Member since 2025 · 204 posts · 101 votes6mo
Hard money lenders are different from traditional banks because they focus more on the deal itself rather than your personal income. They are asset-based lenders, which means the property and its potential value matter most.
At a basic level, here is what they look at:
- The value of the property, especially the after repair value (ARV)
- Your plan for the property, whether you are selling or refinancing
- The overall deal numbers, including purchase price, rehab costs, and projected profit
You will typically see higher costs compared to traditional financing. Interest rates are usually in the range of 8% to 12% or higher, along with upfront points. These loans are short term, usually 6 to 18 months, and often come with interest-only payments.
Hard money makes the most sense when you need to move quickly or when the property would not qualify for a conventional loan. It is commonly used for fix and flips or value-add opportunities where you plan to improve the property and either sell it or refinance.
The biggest thing to be careful about is having a clear exit strategy. Because the loan is short term and more expensive, delays can eat into your profit quickly. You want to know exactly how you are getting in and how you are getting out before you close.
A lot of investors use hard money as a bridge, then refinance into a longer-term loan once the property is stabilized.
If you are looking at a specific deal, it is always smart to run the numbers first. That will tell you whether hard money actually works for that situation.
If you ever want a second set of eyes on a deal, I’m happy to help you break it down, look at financing options, and show you how to structure it the right way from the start. I work with investors in multiple states and can walk you through it step by step. Feel free to reach out anytime.
- Lender · Chicago, IL · Member since 2025 · 204 posts · 101 votes6mo
A small multifamily with light rehab and rents about $200 under market is exactly the kind of deal lenders like to see, because there’s a clear path to increasing value. The fact that you know your market well is a big advantage, especially in a smaller town where outside lenders may not fully understand it.
Here’s how I would look at it from the mortgage side:
-
Acquisition + light rehab
If the property needs some work upfront, you could use short-term financing like bridge or hard money to move quickly and handle the updates. -
Stabilization plan
The goal is to bring rents up to market in a realistic timeframe. That increase is what strengthens your position for the next step. -
Refinance into long-term financing
Once the property is stabilized, you can refinance into a DSCR loan where the property's income does the qualifying, not your personal income. That is what helps you scale. -
Local lending options
Do not overlook local banks and credit unions. In smaller towns, they can be more flexible and sometimes offer better terms because they understand the area.
From a lender’s perspective, it all comes down to the story the numbers tell. Purchase price, rehab, and projected rents all need to line up so the deal works both on the front end and after stabilization.
If you want, I can take a look at the deal with you and walk you through exactly how I would structure it, including leverage options and what your refinance could look like once rents are up. I do this as a complimentary service, so feel free to reach out anytime and we can go through your numbers together.
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Acquisition + light rehab
- Member since 2011 · 152 posts · 113 votes6mo
As a long-time hard money lender myself, I will add a few thoughts.
1. The further away from the area that you are investing is that the hard money lender is located, the more that hard money lender will feel like a bank. That's because they have to make up for the fact that they don't have a personal relationship with you, and they are never going to visit the property you want to borrow against. I know every one of my borrowers (they are other investors in my market), and I walk every property inside and out before agreeing to lend. I can tell you how much I will lend you and the terms of that loan at the end of the walk-through.
2. If you want to find out who the hard money lenders are in your area, seek out the local landlord/investor groups. Join. Participate, Go to their meetings, and take their classes. The hard money lenders are the old guys who still attend the meetings but who have sold off their properties and have a pile of money to lend to the other investors who are earlier on in their real estate journeys. You probably aren't going to ask them to lend you money on any sort of project they haven't already done themselves, so they can give you input/advice on your project that you're not going to get from out-of-town lenders.
- 6moJesus FloresPro MemberRental Property Investor · San Diego, CA · Member since 2019 · 19 posts · 14 votes
Hey @Jacob Breytspraak, when I’m vetting hard money lenders, I usually run through a standard checklist. This is my personal general list, and I adjust it depending on the deal:
- Minimum Loan Amount
- Personal Name or LLC
- Lien Position
- Term (Months)
- Rehab (%)
- Rate, Fixed (%)
- Inspections (Yes/No)
- Appraisal or BPO (Yes/No)
- Amortization (Interest Only, etc.)
- Prepayment Penalty or Exit Fee (Yes/No)
- Fees (Origination Points, Underwriting Fee, Attorney Fee, Appraisal, Processing Fee, Doc Fee, Any Other Fees)
Good Luck!
- Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 409 votes6mo
Understand the difference between hard money and private money as this could save you a lot in fees
- Specialist · NJ · Member since 2022 · 1k+ posts · 660 votes6mo
Hard money usually refers to bridge loans. Bridge loans are what is used to buy distressed properties that need work. The loans include 80% - 90% of the purchase price plus the rehab needed. The loans are capped at 65%/70%/75% of the ARV depending on extenuating factors. They are interest only loans that have a duration of 6 - 24 months with 12 month bridge loans being the norm. This is the B of the BRRRR.
The Pros:
If you know what you are doing, and your numbers are right, and your margin - worst case - is what you've been calculating on then this could work for you, especially if you get in at a discount. Instead of paying 100% - 110% of properties worth on MLS or 90% - 95% of it's worth through a wholesaler, you have access to buy at 60% - 80% for cash and then can enter the bridge loan after ownership.
You use cash for the access to alternate sourcing methods. Once you own it, you can enter a bridge loan within 6 months where you'll get like 80% of the value plus rehab funds in a loan. Now, if you bought a 150k property for 90k and after you put 80k in it is worth 300k you will get all your money back. The guy who is in for 150k plus closing costs will not.
One guy will cashflow about 500 - 700 per month and the other 200 - 300. That's how important sourcing is.
- Investor · Austin, TX · Member since 2021 · 497 posts · 127 votes6mo
Good question
Hard money lenders are typically used for short-term deals like fix & flips or properties that don't qualify for traditional financing. They focus more on the deal itself (purchase price, rehab, ARV) rather than personal income.
Most investors use them to move quickly on opportunities and then refinance or sell once the project is complete.
I work with investors using these types of loans and can break down how the structure usually works depending on what you’re trying to do.
Are you looking to use it for a flip, rental, or just exploring options right now?
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