Investor Series – Hard Money Lending
December 15, 2022
This is another submission in our ongoing series of investor articles. Today we’re going to talk about Hard Money Lending.
Hard Money lending is typically dealing with the private sector for funding. These lenders are wealthy individuals or groups who have large sums of cash available for loans on investor projects. They are a very attractive option due to the flexibility they offer for unique projects. Since there aren’t any underwriters or lending conditions, its quite easy to obtain these loans. You just have to convince the private lenders that you’re a good risk and agree to their terms.
The terms can be quite lucrative for the lender and usually this money is quite expensive to obtain. Most Hard Money loans are very short term and best utilized for flips or projects that won’t take longer than a few months to complete. These lenders like to get their money in and out of projects fast and will heavily load fees and interest on the back end if you take too long to pay them back.
Due to the way these loans work, they can only be obtained on investment projects. You can’t use Hard Money to buy a home you intend to live in as your primary residence long term.
Finding Hard Money lenders can be a challenge. Your best option is to contact a Real Estate agent who deals with investor type properties. Another source is on investor forums and message boards where they sometimes advertise.
