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Defining “Hard Money”

Guest post by: C.J Lauria

Article Overview: Even though the rates can be high, hard money can be quite useful when an investor has an opportunity to buy a property for a low price and sell it for a profit. Simply put, hard money even with its drawbacks can be a great tool in providing the capital necessary to facilitate a Real Estate Investor.

Defining “Hard Money”

We hear more and more about “hard money.” What is it, and what makes it so “hard?” Hard money is a term for a loan product offered by private companies instead of the banks. The term “hard” comes from the fact that it is secured by a hard asset. It is also referred to as “Private Money,” “Real Estate Private Lending,” and “Bridge Money.” Usually the capitalcomes from private Investors that live locally to where the loans are being made. Although the loan process is similar to a bank, there are distinct differences.First let’s compare bank money with that from Real Estate Private Money Lenders:

(Visit Invesdoor site for the table - see under Private Lending > Financing Sources)

Why use Hard Money? Most borrowers who use hard money do it for the following reasons:

• They personally cannot qualify or the real estate does not qualify for a regular bank loan.
• They do not have time to wait for a bank loan to be approved.
• They want to borrow money with a business entity and/or do not want to personally guarantee a loan.

Even though the rates can be high, hard money can be quite useful when an investor has an opportunity to buy a property for a low price and sell it for a profit. Simply put, hard money even with its drawbacks can be a great tool in providing the capital necessary to facilitate a Real Estate Investor.

How do I find Private Money Lenders and get a Hard Money Loan?

Please review the real estate Private Lending section of Invesdoor where you can learn more about the process and get your hard money questions answered. With the opportunities that today’s market affords, it pays to know all of your options so that you ultimately can get the deal done!

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Article Tags: hard money, private lending, real estate investor



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