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We are often asked: What is Hard Money?

hard mon·ey n. a conservative loan made against hard assets.
 

Usually made by private investors and not by banks, the hard money lenders main concern is that his entire principal will be returned if there is a problem with the property. So he lends much less, as a percentage, than a bank would.

He also knows there are more risks because the investment property is usually (but not always) in various stages of disrepair, your basic fixer upper house. He is compensated with a slightly higher interest rate and more upfront fees know as "points" A point is one percent of the loan balance to be borrowed.

For the real estate investor this is a virtual goldmine. If you are able to secure a contract on a handyman special that is undervalued you may be able to get a loan for 100% of the purchase price and the fix-up costs!
 

The hard money lender is going to base his estimate of value on the price the home will sell for AFTER it is repaired (ARV). Some lenders will even lend you some or all of the fix up money.

People always ask: Why is the interest rate so high? The interest rate may appear high as compared to the interest rates you might pay on say an owner occupied mortgage loan. In reality that is short sighted thinking. You have to look at the situation as "access to capital".

With no money in your pocket, sometimes no credit or income verification, you are able to borrow tens of thousands of dollars, maybe even hundreds of thousands, simple because you have secured a contract on an undervalued handyman special. 
 




RehabHardMoney.com in conjunction with sister site RehabList.com is the nation’s leader in lead generation for hard money lenders. As THE marketplace for undervalued homes nationwide RehabList provides daily leads for hard money loans to savvy lenders.

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What better way can an enterprising person ask for to be able to get ahead in life? With enough work and determination, and just your willingness to learn a few simple rules and techniques you can be on your way to being a full time real estate investor and someone else will provide the money for that to happen!

Find the right lender for you.

 

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The Definitive Guide to Buying and Selling Fixer Uppers

Rehabbing for Fun and Profit

We are often asked: What is Hard Money?

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