How does Hard Money work?

Question

For example: There is a XYZ for sale in Miami, FL. It contains two properties for the price of one ($300k). I want to buy it with Hard Money, and then repay the Hard Money by opening a credit line on the two properties after. Would this be possible? If not, what would be a more plausible way to go about buying this property. Any help/advice/comments would be greatly appreciated.

Andy Webb · Answer

What is the condition of the property?  Does it need much work?  This is what will drive whether or not you need hard money as a bridge loan.

Account Closed · Answer

if you are renting it out i dont think you can get hard money. they have pretty high interest rates but are good because they can give you the cash within a week.

theyre mainly for fix n flip.  if the owner offers financing for 40% i dont see why not,but i could be wrong

Ben Lee · Answer

Thanks for your response Rob. I already have a first mortgage, so chances of the bank lending a conventional loan to me are slim. I'm thinking about buying the property to either buy and flip or just renovate and rent out. If the Owner offers financing on 40% can I use hard money for the other 60%? Or thats not possible. Trying to make something out of nothing.

Rob Beland · Answer

The problem you will have with hard money is that the property will likely only be able to borrow about 60% of the value of the property. Why aren't you just getting a regular mortgage on the property? What's your goal with this property? Flip? Buy and hold? I think more info is needed to offer more advice.