Hard Money Contracts

[Nick Militello]

I am looking to ask family for a hard money loan for a property. My self employed status and 2020 tax return are making a conventional loan difficult. Is the a template document available to use as a contract? If not, what steps should I take to help create a secure contract with the hard money family member?

[Andrew Garcia]

Hi @Nick Militello, hard money is not your only option if you cannot get a conventional loan. 

Hard money loans generally come with double-digit interest rates so I would advise against it if you have other options. Below are my recommendations:

1. Bank statement loan. they qualify you based on the money deposited into your bank account, not on tax returns.

2. DSCR loan. They qualify you based on the fair market rent of the subject property, not on any personal income.

Obviously, there is a lot more to say about these loans but those generally carry much lower interest rates than hard money.

Hope this helps! Let me know if I can be of any assistance.