Hard Money Collatoral

[Wes Holmes]

I'm just curious whether hard money loans are ever collateralized by anything other than the real estate being purchased. I'm reading an application that sounds as if my personal assets would back the loan. That even though I'm borrowing through an LLC...essentially business to business. Anyone heard of this?

[David Ramirez]

Yes, they sometimes ask for extra types of security if they're worried about the borrower's ability to repay. This might mean asking for personal guarantees or using assets like personal belongings, investments, or other valuable items as collateral, aside from the property being bought. These additional assets give the lender more assurance in case the borrower can't repay the loan.