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WHAT IS HARD MONEY?

Hard money is a equity-based real estate loan you get from a non-traditional lender. Hard money interest rates usually range from 9% to 25%. Most hard money lenders also charge points. One point is one percent of the loan amount. The points charged often can be financed into the loan or paid at closing by the borrower. Points on hard money can range anywhere from 1-15 per transaction but typically range 4-8. Overall, hard money is expensive but it's usually CHEAPER than using a partner.

If you'd like to apply for one of our hard money loans click here now.

Why would someone use hard money? Because most these lenders are more concerned about the property you're buying than the person buying it. This is not to say hard money lenders don't care about the person buying it but care less than typical lenders. Most banks and traditional lenders care more about the borrower than the property being purchased. Hard money lenders tend to take to opposite approach. Typically, hard money lenders will loan you 40-75% of a the property's value and secure the loan against the hard equity of the property, hence the name hard money.

There are many types of hard money loans. One type of loan that has grown incredibly in popularity over the past 15 years is the hard money rehab loan. Many hard money lenders offer rehab loans that will provide the borrower with 60-75% of the after-repaired value of the property and will lend on properties that most banks and mortgage lenders would never even consider.

For more info on Hard Money Lending or Real Estate Investing check out our articles in the Real Estate 101 section.