Tag Archive for: Hard Money

Stop Confusing These Loans! Fix and Flip vs Hard Money Explained

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Stop confusing these loans! Fix and flip vs hard money explained! Are you a real estate investor wondering which loan to use? Maybe you’ve heard of fix and flip loans and hard money loans, but you’re not quite sure which one is right for your next deal.

Let’s break it down. These two loans may seem similar, but they are not the same. Understanding the difference can save you time, stress, and thousands of dollars.

What Is a Fix and Flip Loan?

A fix and flip loan comes from big lending companies—usually backed by Wall Street money. These lenders include names like Kiavi, RCN, and Lima One.

They work well if:

  • You have good credit (typically 680+)

  • You have money for down payments and reserves

  • You’re buying a standard single-family home

  • Your deal fits in their box

Here’s What “Their Box” Means:

Fix and flip lenders want:

  • Properties in clean neighborhoods

  • Homes that sell between $250K and $350K

  • Borrowers with 3–5 flips already under their belt

  • A simple exit strategy like resale or refinance

Example:

You find a house worth $100,000 that will be worth $200,000 after repairs.
The lender might offer:

  • 90% of the purchase = $90,000

  • 100% of rehab = $40,000

But—you’ll need to bring the 10% down, plus have extra money set aside for reserves, closing costs, and interest payments.

What Is a Hard Money Loan?

Hard money loans are different. They come from real people or small private lenders. These lenders focus more on the deal than on your credit or experience.

They work great if:

  • Your credit score is lower

  • Your deal is outside the box

  • You don’t have a lot of cash to put in

  • You need flexibility

Hard money lenders look at:

  • Loan-to-value

  • Market strength

  • Exit strategy

  • Your ability to finish the project

Example:

You find a house worth $200,000 after repairs.
You can buy it for $80,000 and fix it up for $20,000.

That’s only 50% of the ARV (After Repair Value).

With a deal this strong, a hard money lender might fund:

  • 100% of the purchase

  • 100% of the rehab

  • Even your closing costs

You walk in with $0 out of pocket because the deal makes sense.

Fix and Flip Lenders vs Hard Money Lenders

Let’s compare side by side:

Feature Fix and Flip Loans Hard Money Loans
Credit Score Needed 680+ Not score-driven
Property Type Standard, 1–4 unit Unique, land, large, or small deals
Experience Required 3–5 previous flips Helpful, but not required
Cash Needed Upfront Down payment + reserves May offer 100% if the deal is strong
Speed and Paperwork Slower, more docs Faster, less paperwork
Who It’s Best For Cookie-cutter flips Unique or off-market opportunities

So, Which Loan Should You Use?

It depends.

➡️ Use a fix and flip loan if your deal is clean, simple, and in a popular area. You’ll likely get a lower rate and lower points—but you must fit their box.

➡️ Use a hard money loan if your deal is messy, different, or small-town. You’ll pay a little more, but the lender will work with you. They care more about the property and less about perfect credit or experience.

Bonus: The Best Loan for BRRRR Investors

If you’re using the BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat), hard money can be a great fit. Why?

Because hard money lenders can fund 100% of the deal if the numbers work and you’re already pre-approved for your refinance loan.

Final Thoughts

Both types of loans can be powerful tools. The key is knowing:

  1. What your deal looks like

  2. How much cash you have

  3. What kind of lender will work with you

👉 Fix and flip loans give you great terms if you fit the mold.
👉 Hard money loans give you flexibility when life—and deals—don’t fit the mold.

Need Help Finding the Right Fit?

At Hard Money Mike, we work with both kinds of lenders. And we have free tools like:

  • ✅ Cash Flow Worksheet

  • ✅ Quick Deal Analyzer

These tools help you know if a deal is worth doing before you borrow a single dollar.

👉 Download them now and take the guesswork out of your next investment.

Stop confusing these loans! Fix and flip vs hard money explained! Watch our most recent video to find out more!

Top 5 Questions to Ask Hard Money Lenders

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Today we are going to discuss the top 5 questions to ask hard money lenders before you get a loan. Not all hard money lenders are the same. That’s why asking the right questions before you sign is key. Whether you’re doing a flip, a BRRRR, or a bridge loan, these five questions can save you time, stress, and a whole lot of money.

1. What Are Your Total Costs?

Don’t just look at the interest rate. Lenders can make their deals sound great by hiding extra fees.

👉 Some charge low interest, like 10%, but add in:

  • 2 points (That’s 2% of the loan upfront!)

  • $1,000 in processing fees

Let’s break that down:

  • Loan Amount: $200,000

  • 2 Points: $4,000

  • Six Months of Interest at 10%: $10,000

  • Processing Fee: $1,000

  • Total: $15,000

Now compare it to another lender:

  • Interest Rate: 12%

  • No Points

  • But $4,000 in other fees

  • Six Months of Interest at 12%: $12,000

  • Total: $16,000

👉 Even with no points, the second lender costs more.

💡 Use a tool like the Loan Cost Optimizer at hardmoneymike.com to compare lenders side-by-side.

2. How Do You Decide Loan Amounts?

Lenders calculate what they’ll lend based on different values. Some use just the purchase price, others use ARV (After Repair Value).

Let’s look at two examples:

  • Purchase Price: $150,000

  • Rehab Costs: $50,000

  • ARV: $300,000

One lender might only give you 75% of the purchase price, or about $112,500.

Another lender might lend based on ARV, offering:

  • 90% of the purchase = $135,000

  • 100% of the rehab = $50,000

  • Total Loan: $185,000

👉 That’s a huge difference. Ask if they use purchase price or ARV to calculate your loan.

3. How Do You Decide Property Value?

This one’s big. Some lenders use real appraisers. Others use in-house tools or AI. The problem? They can value your property way lower than what it’s actually worth.

Example:

  • One lender values the ARV at $300,000

  • Another comes in at just $250,000

If they lend up to 75%, here’s what you’d get:

  • $300,000 ARV: Loan up to $225,000

  • $250,000 ARV: Loan up to $187,500

👉 That’s almost a $40,000 difference in your funding!

Always ask:

  • Who determines value?

  • Can I provide my own comps?

  • Can I dispute a low value?

4. Are There Prepayment Penalties?

Some lenders sneak in rules like:

  • Minimum interest guarantees

  • 3, 6, or 9-month required interest payments

Even if you pay the loan off early, you’re stuck paying interest for those months.

👉 Ask about any minimum interest periods. Make sure the loan fits your timeline.

5. How Do Draws Work?

If you’re doing a flip or a BRRRR, you’ll likely have rehab money held in escrow.

For example:

  • Rehab budget: $50,000

  • That money is held until work is done

  • You’ll get it back in draws (aka stages)

Ask:

  • How fast can I get my draw?

  • Are there fees every time I request one?

  • Do I need an inspection or lien waivers?

👉 If your contractor can’t get paid, they might walk off the job. That’s the last thing you want.

Final Thoughts

These five questions can help you find the best lender for your project:

  1. What are the total costs?

  2. How is the loan amount calculated?

  3. How do you come up with property value?

  4. Are there prepayment penalties?

  5. How do your draws and escrow work?

✨ Want help comparing lenders? Try the Loan Cost Optimizer at HardMoneyMike.com.

Watch our most recent video to find out more about: Top 5 Questions to Ask Hard Money Lenders BEFORE You Get a Loan

What’s Better for You: Hard Money or a Partnership?

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Today we are going to discuss what’s better for you: hard money or a partnership. Every investor runs into this question sooner or later:
Should I use hard money or bring in a partner?

Let’s break it down so you can choose what fits your deal best.

First, What’s Hard Money?

Hard money is a loan based on the property — not your personal income.
You borrow from a lender and pay interest, but you keep full control of the project.

Pros of Hard Money:

  • Fast funding. Many loans close in just a few days, which can give you an edge.

  • No partner needed. That means you get to keep 100% of the profits.

  • Flexible terms. It works well for flips or short-term projects.

Cons of Hard Money:

  • Higher rates. You’ll pay more than you would with a traditional loan.

  • Short terms. So, you’ll need to finish fast or refinance quickly.

  • More risk. If the deal goes sideways, you’re the one responsible.

Example:
Let’s say you find a flip that needs $200,000.
A hard money lender gives you $160,000 (80% of purchase), and you put in $40,000.
You make monthly interest payments. Then, when you sell the property, you keep all the profit.
In this case, hard money gave you speed, control, and full profit — but it also came with risk.

On the Other Hand, What About a Partnership?

A partnership means you team up with someone else.
Usually, they bring the money, while you bring the hustle.

Pros of a Partnership:

  • No loan required. You don’t need to qualify or make payments.

  • Shared risk. If things go wrong, you won’t shoulder it all alone.

  • Build strong connections. A great partner today could help with 10 deals tomorrow.

Cons of a Partnership:

  • Split profits. Often, you’ll walk away with only 50% — or sometimes even less.

  • Less control. You’ll need to agree on decisions, which can slow things down.

  • More communication. You’ll need to share updates and work closely together.

Example:
Let’s say that same $200,000 flip comes up.
Your partner funds the whole thing, including repairs. You do the work.
Then, you split the profits 50/50.
This works great if you don’t have the funds, but you’re willing to trade profit for opportunity.

So, Which Is Better?

Well, that depends on what you need the most.

Choose Hard Money If:

  • You want full control of your deal

  • You have the down payment and monthly payments covered

  • You believe in the deal and want to keep all the profit

Choose a Partnership If:

  • You don’t have enough cash or credit

  • You’re new and want to lower your risk

  • You’re okay sharing profits in exchange for experience

A Quick Comparison

To help you decide faster, here’s a side-by-side look:

Feature Hard Money Partnership
Profit Share 100% yours Shared
Control All yours Shared decisions
Risk All yours Shared
Cost Monthly payments No loan payments
Speed Very fast funding Depends on partner
Experience Needed Some required Can be new

Final Thoughts

At the end of the day, there’s no wrong choice — only the right fit for your deal.
Some investors use hard money to scale fast. Others build long-term success with great partners.
In fact, many smart investors use both, depending on the deal.

So before you jump in, think about your goals:
Do you want control, or would you rather share the load?
Do you have money for payments, or would a partner give you the boost you need?

Whatever you choose, take action.
Deals don’t wait, and neither should you.

Need help deciding?
We can walk you through it, run the numbers, and help you pick the smartest path forward.
Reach out today — your next deal could be one good decision away.

Contact Us Today! 

Is hard money or a partnership better for you? Contact us today to find out more!

Free Tools For You! 

We also have free tools available! Download the Loan Optimizer to compare financing options side by side!  

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success

5 Tips to Get Approved by Hard Money Lenders Fast!

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Today we are going to discuss the 5 tips to get approved by hard money lenders fast! Hard money loans are a great option for real estate investors who need fast funding for unique deals. Unlike traditional bank loans, hard money lenders focus on the property and exit strategy rather than personal income or credit scores. Let’s take a closer look!

1. Have a Clear Exit Strategy

Hard money lenders want to know how you plan to pay back the loan. Whether it’s flipping the property, refinancing into a long-term loan, or selling part of the land, your exit strategy must make sense.

Example: If you’re flipping a house, explain how long renovations will take and what comparable homes in the area are selling for. Show that you have a solid plan to sell quickly and at a profit.

2. Keep the Loan Term Short

Hard money loans are meant to be short-term solutions, usually between 9 to 12 months. The faster you can complete your project and pay off the loan, the better your chances of approval.

Example: If you’re subdividing land, outline a timeline for approvals, sales, and closing. A clear plan reassures lenders that they’ll get their money back quickly.

3. Show Responsible Credit Habits

Hard money lenders don’t care about your credit score, but they do look at your credit history. If you have a pattern of late payments, bankruptcies, or foreclosures, it may raise concerns.

Tip: If your score is low due to high credit usage but you always pay on time, highlight that to the lender. They’re more interested in your payment habits than the number itself.

4. Keep Your Loan-to-Value (LTV) Low

Most hard money lenders prefer an LTV under 75%. For fix-and-flip deals, they typically lend up to 75% of the After-Repair Value (ARV). The lower the risk to the lender, the faster they’ll approve your loan.

Example: If you’re purchasing a $200,000 property expected to be worth $300,000 after repairs, a hard money lender may lend you up to $225,000 (75% of ARV).

5. Move Quickly and Be Prepared

Hard money lenders work fast, but they expect you to move just as quickly. Have all required documents ready, including property details, a project timeline, and any additional funding sources.

Tip: Work with a lender who understands your local market. A lender familiar with your area can approve deals faster because they know the risks and opportunities.

Final Thoughts

Hard money loans can be a game-changer for real estate investors who need fast, flexible funding. By following these “5 Tips to Get Approved by Hard Money Lenders Fast”, you’ll increase your chances of securing the funds you need without delays.

If you’re ready to compare rates, try our Loan Cost Optimizer to find the best hard money loan for your next project! Contact us today!

Watch our most recent video to find out more!

Hard Money vs. Traditional Loans

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Today we are going to discuss hard money vs. traditional loans. When it comes to real estate, picking the right type of loan can make or break a deal. Two common options are hard money loans and traditional loans, but they’re as different as night and day. Let’s break it down.

Hard money loans

Hard money loans are short-term loans that are all about speed and flexibility. They’re funded by private lenders who care more about the property’s value than your credit score or income. Need to close fast on a fixer-upper? A hard money loan might be your best bet. These loans usually come with higher interest rates and shorter repayment periods, making them great for quick projects like flips.

Traditional loans

On the other hand, traditional loans, think mortgages from banks or credit unions, focus on you as the borrower. They’ll dive deep into your credit, income, and debt before approval. These loans take longer to close but often come with lower interest rates and longer terms. Traditional loans are perfect for long-term investments, like rental properties you want to hold onto for years.

Example:

Here’s a quick example: If you’re flipping a house and need money within a week, a hard money loan could save the day. But if you’re buying a rental property to build wealth over time, a traditional loan might be the smarter move.

Each loan type has its place. The key is matching the loan to your goals. Ready to dive deeper? Let’s explore how to choose the right one for your next deal.

Contact Us Today! 

Which is best for your next investment need, Hard money vs. traditional loans? Contact us today to find out more!

Free Tools For You! 

We also have free tools available! Download the Loan Optimizer to compare financing options side by side!  

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success! 

Hard Money vs. DSCR Loans: Which One Fits Your Deal?

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Today we are going to discuss hard money vs. DSCR loans: Which one fits your deal? If you’re a real estate investor, you’ve probably heard of both hard money loans and DSCR loans. They’re both powerful tools, but they work in different ways. Let’s break it down so you know which one fits your next deal.

Hard money loans are like a quick fix for short-term projects. Imagine you’ve found a fixer-upper that needs work before it can shine. A hard money loan gives you the cash fast, but it often comes with higher interest rates and shorter repayment terms. It’s like borrowing from that one friend who says, “Pay me back in a month, or else!”

On the other hand, DSCR loans are better for the long haul. These loans are based on your property’s income, not your personal finances. Say you’ve got a rental property bringing in steady cash every month—this loan is built for that. DSCR loans offer longer terms and more stability, making them great for rentals.

Here’s a quick example:

  • Fixing and flipping a run-down house? Hard money might be your answer.
  • Holding onto a rental that pays its way? DSCR loans can make your life easier.

Choosing the right loan depends on your goals. Short-term flip? Go hard money. Long-term rental income? Think DSCR. It’s all about matching the loan to your strategy!

Contact Us Today! 

Hard money vs. DSCR loans: Which one fits your deal? Contact us today to find out more!

Free Tools For You! 

We also have free tools available! Download the Loan Optimizer to compare financing options side by side!  

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success! 

Hard Money vs. Cash: Which Works for Your Deals?

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When it comes to real estate investing, one big question is: Should I use hard money vs cash? Each option has pros and cons, and the right choice depends on your goals and situation.

Hard money is a loan from private lenders, usually for short-term needs. Think of it as a tool to grab great deals fast. For example, if you find a fixer-upper at a steal, a hard money loan can help you buy it quickly and fund repairs. But be careful, these loans often come with higher interest rates and fees.

Cash, on the other hand, gives you ultimate control. There are no monthly payments, no interest, and no lender to answer to. But tying up all your cash in one deal can leave you short for future opportunities or emergencies. Imagine putting every dollar into a property, only to miss out on a killer deal later because your funds are tapped out.

Both hard money and cash have their place. Hard money helps you move fast and stretch your resources. Cash offers simplicity and peace of mind. The key is finding the right balance for your investing strategy.

Contact Us Today! 

Which is best for your next investment need, Hard money vs Cash? Contact us today to find out more!

Free Tools For You! 

We also have free tools available! Download the Loan Optimizer to compare financing options side by side!  

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success! 

How Can You Find Funding to Finish a Project?

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Today we are going to discuss how you can find funding to finish a project. You’re almost there, your project is so close to the finish line, but funding has run dry. What can you do? Don’t worry; there are ways to secure the money you need to wrap things up and see your project through.

One option is a short-term bridge loan. These loans are designed to help investors like you finish a project quickly. For example, imagine a house flipper running out of funds during the final stages of renovation. A bridge loan can provide the cash to cover the last repairs and get the property ready to sell.

Another choice is leveraging a home equity line of credit (HELOC). If you have equity in another property, this can act as your safety net. Picture this: you own a rental property with equity built up, and you tap into it with a HELOC to cover project costs.

Sometimes, smaller private lenders are more flexible than banks. They often work with investors in unique situations, like funding smaller deals in small towns or unfinished projects.

The key is knowing where to look and having a solid plan to show lenders. The better your project looks on paper, the easier it will be to find the funding you need to finish strong.

Contact Us Today! 

What type of financing is right for you? Contact us today to find out more about real estate investment loans!

Free Tools For You! 

We also have free tools available! Download the Loan Optimizer to compare financing options side by side!  

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success! 

Private Money vs. Hard Money: What’s the Difference for Real Estate Investors?

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Today we are going to discuss hard money vs private money. As a real estate investor, you’ll hear the terms private money and hard money tossed around a lot. Both can help you fund deals, but they come with key differences. Knowing these can save you time, money, and stress.

Let’s break it down.

Hard money loans come from professional lenders. These lenders specialize in quick, short-term loans for real estate deals like flips or rentals. Hard money often means higher interest rates and fees, but you get speed and reliability in return. For example, if you find a fix-and-flip deal that needs to close in 10 days, hard money might be your go-to.

Private money, on the other hand, usually comes from individuals—friends, family, or other investors. These loans often have flexible terms since the lender isn’t a professional. Imagine asking a retired family member to fund your next rental in exchange for interest payments. With private money, relationships matter more than a credit score.

So, which is better, hard money vs private money? It depends on the deal. If you need speed and structure, hard money may be the answer. If flexibility and trust are key, private money might work best.

Contact Us Today! 

Which is best for you, hard money vs private money? Contact us today to find out more!

Free Tools For You! 

We also have free tools available! Download the Loan Optimizer to compare financing options side by side!  

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success! 

What Is Hard Money?

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Today we are going to answer the question, “What is hard money?” Hard money is a quick and flexible way for real estate investors to get funding. It’s different from traditional loans. Instead of banks, private lenders provide the cash. The loan is backed by the property itself, not your credit score or income.

Think of hard money as a bridge. It helps you close deals fast or fix up properties when traditional lenders might slow you down.

For example, let’s say you find a fixer-upper with huge potential. A regular bank says no because the property needs repairs. A hard money lender, on the other hand, sees the property’s future value. They offer you a loan based on that. This gives you the chance to buy the property, renovate it, and either sell it or refinance with better terms later.

The trade-off? Hard money loans often have higher interest rates and shorter terms. They’re not meant for long-term financing, but they’re a powerful tool when used wisely.

If speed and flexibility are key, hard money can open doors that traditional loans keep shut. It’s about making the deal work, even when the numbers seem tricky.

Ready to learn how to use hard money the right way? Stick around for more tips and insights!

Contact Us Today! 

What type of financing is right for you? Contact us today to find out more about real estate investment loans!

Free Tools For You! 

We also have free tools available! Download the Loan Optimizer to compare financing options side by side!  

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success!