What is hard money for real estate investing?
Hard money is the main type of financing for fix and flips and discounted rental property purchases. AKA, value-add properties.
Hard money loans are based mainly on the property and the loan-to-value (LTV) of the property. These loans are typically secured by a 1st lien on the piece of real estate being flipped or rented.
These loans are also referred to as:
- Fix and flip loans
- Rehab loans
- BRRRR loans
- Private money loans
- Bridge loans
The top 3 benefits of using hard money include:
- FAST closings. This allows real estate investors to bid more aggressively on the value-add properties they desire compared to those who use traditional closing timeframes (30+ days). Faster closings with fewer hurdles means sellers are more likely to give a discount on their property.
- Up to 100% financing. This gives real estate investors the ability to spread their money out and purchase more discounted properties.
- Ability to buy properties as is. Most traditional lenders do NOT like properties that aren’t move-in ready. These type of loans on the other hand, are custom-built for fixer uppers.
In a nutshell, hard money loans are perfect for real estate investors who like to focus on value-add properties…and creating positive cash flow!
Hard Money Mike has been assisting real estate investors for over 20 years. Looking for any form of financing we are here to assist. Contact us for hard money, traditional lending and setting up bank lines of credit. Email us any questions today at email@example.com.
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