Hard Money Lenders

5 Replies

Hi BP community, as a new investor we all know that obtaining financing is nearly impossible. Can anyone give a little insight on using hard money lenders...Good, Bad, maybe ??


Incredible expensive, but if there is no other way to do the deal and you can make money after paying them, go for it.

If you have a good credit history and 25% cash down and sufficient income obtaining conventional financing for up to four houses is actually very easy.

If you don't have the above requirements, then you scramble to put together any deal until you have proven success and proven track record with which to attract private financing partners.

Hard money borrowing eliminates many otherwise profitable transactions since the profitability needs to be much higher to pay the hard money rates.

The hurdle with conventional financing is about 5%.  The hurdle with hard money (points  plus interest) is 15-20%.

Thanks Aaron, however, not doing a quick flip but long term.

Don I actually have a good credit history but only been investing a year so no track record or 2 year tax returns for conventional financing. And I would need this hard money lender throughout the entire 3 years. Just didn't know if long term was a WISE thing to do with HML, not to mention the balloon payment. Options are limited :(

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@Don Konipol  What is considered "sufficient income" in conventional lending scenarios? What would be an adequate debt to income ratio? And how do those kind of requirements apply to hard money?

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