What is Hard Money?

Financing for Investors

A “hard money” loan is based on the value of the “hard” asset - the real estate in this case. In most cases you cannot get these loans from your local bank or mortgage lender. There are hundreds of non-bank institutions that originate these loans for investors. They are typically interest-only short term loans at rates higher than standard mortgages. The term is usually 6 months to 1 year. 

Sometimes referred to as bridge loans, it is possible to borrow a portion of the repair costs as well. The loan amount is typically capped at around 70% of the future value of the asset (the After Repair Value). Individual lenders have different rates and terms. It pays to shop around. 

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