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What is a hard money loan?
A hard money loan is a short-term real estate loan from a private lender, based mainly on the value of the property rather than your income.
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Estimate only. Loan amount is the lower of 100% of purchase plus rehab or 70% of the sale price when finished (after-repair value). Minimum loan $150,000. Business-purpose loans on investment property.
The short definition
A hard money loan is secured by real estate and made by a private lender. It is "hard" because it is backed by a hard asset, the property. It is short-term, usually 6 to 24 months, and is used by investors to buy, renovate or bridge to a longer loan.
Who uses hard money
- Fix and flip investors buying houses that need work
- Investors who need to close faster than a bank can
- Buyers of houses a bank will not lend on because of condition
- Investors bridging to a long-term rental loan after a renovation
How the loan amount is set
Hard money lenders size loans from the property: the purchase price, the rehab budget and the after-repair value. We lend up to 100% of purchase and rehab, capped at 70% of the after-repair value.
| Deal | Amount |
|---|---|
| Purchase price | $175,000 |
| Rehab budget | $55,000 |
| After-repair value | $340,000 |
| 70% of after-repair value | $238,000 |
| Loan amount | $230,000 |
Cost and terms
Hard money costs more than a bank loan because it is faster, more flexible and short-term. Pricing depends on the deal, your experience and your credit. Submit the deal to get your actual terms. Read more in hard money loan rates.
Hard money loans across Dallas–Fort Worth
We lend on investment houses throughout the DFW metroplex, in Dallas, Tarrant, Collin, Denton and surrounding counties.
Questions investors ask
Straight answers about hard money loans.
Why is it called hard money?
Because the loan is backed by a hard asset, the real estate.
Is a hard money loan a mortgage?
It is secured by the property like a mortgage, but it is a short-term business-purpose loan.
What is the smallest loan you make?
Loans start at $150,000.
How fast can you close?
We can close in about 5 days once we have the contract, the rehab budget and title is open.
Can I use this loan on a home I will live in?
No. These are business-purpose loans on investment property only. The house has to be one you are buying to renovate and sell or rent.
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