Hard Money Loan

Short-term, asset-based financing primarily used for fix-and-flip projects and BRRRR deals.

Key Characteristics

• Term: 6-24 months (not long-term)
• Interest Rate: 8-15% (significantly higher than conventional)
• Points: 1-4 origination points (1 point = 1% of loan)
• LTV: 60-75% of purchase price or ARV
• Speed: Can close in 7-14 days

When to Use

• Fix & flip projects
• Bridge financing between purchase and refinance (BRRRR)
• Properties that don't qualify for conventional financing
• Auction purchases requiring fast closing

What Lenders Care About

Hard money lenders focus on the property and deal, not your income:

• After-Repair Value (ARV)
• Rehab budget and timeline
• Your experience (affects rate/terms)
• Exit strategy (sale or refinance)

Costs to Factor In

Always include hard money costs in your flip/BRRRR analysis: interest payments, origination fees, and any extension fees.