Hard Money VS Private Money VS Cash
Good morning BP, Happy Thursday!
We all know the name of game in real estate is to use someone else's money over using your own. When purchasing an investment property, which road do you go down to finance your deals and why? The three main ways to finance a distressed property is either a hard money loan, private money, or cash.
A hard money loan is a short term, high interest loan. When using a hard money loan, you are able to leverage your capital while spending less cash out of pocket and diversifying your risk.
Private money is also a short term loan, this loan can come from a group of people, one person, or even an entity. Private money is considered to be cash when purchasing real estate or refinancing real estate.
Cash, we all know and we love. However, when you use cash all of the money is coming out of your pocket... so if something were to turn upside down you're responsible.