Tag Archive for: #Hard Money Mike

How To Comp Properties in a Declining Market

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Today we are going to discuss how to comp properties in a declining market. When the market shifts, your strategy needs to shift too. In a flat or declining market, you can’t just rely on sales from the past six months anymore. Instead, start by looking at what’s on the market right now. Those active listings are your real competition, and they’ll shape what your property will be worth when it’s time to sell or refinance.

Look for Real-Time Clues

For example, if most listings in your area are dropping prices or offering incentives like paying closing costs, that’s a sign values are sliding. You’ll want to factor that in before you buy. Also, make sure your comps match your property closely, same subdivision, similar size, beds, baths, and updates. Even a home one street over could be in a different neighborhood with higher values.

Use Fresh Data and Plan Ahead

Another key tip is to focus on fresh data. Use comps that are no more than three months old, and better yet, study what’s currently listed. Then, run your numbers 5–10% lower to prepare for possible price drops before your project finishes.

For instance, a property valued at $300,000 today might only sell for $270,000 in a few months if the market dips. Planning for that now helps protect your profits later.

Be Competitive in a Buyer’s Market

Finally, take note of price per square foot and the condition of nearby homes. In a buyer’s market, you need to stand out by offering equal or better value.

The Bottom Line

In short, stay flexible, pay attention to trends, and always use the newest data. That’s how you’ll keep clarity, certainty, and profit in a shifting market.

Watch our most recent video today to find out more about: How to comp properties in a declining market.

Need help running your numbers? Contact us today!

Are Hard Money Loans Still Worth It in 2025?

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Today we are going to answer the question, “are hard money loans still worth it in 2025?” Let’s get back to the basics. What is a hard money loan, and why are investors still using it in 2025? Over the past few years, new lenders and Wall Street money have entered the space, creating some confusion. But true hard money lending is still here—and it continues to be one of the most powerful tools for real estate investors who need speed and flexibility.

Fast Alternative to Banks

Banks can feel like a slow-moving ship. Yes, they’ll get you there, but it can take 15 to 45 days to close a loan. Hard money loans, on the other hand, move fast, like a speedboat.

Because they’re asset-based, hard money lenders focus on the property more than your personal income or credit score. That’s what makes them so appealing. You can close quickly, often in just a few days, and grab good deals before anyone else.

Example:
One investor needed to close in two days. The property had title work and insurance ready. While another buyer waited 30 days for their bank loan, this investor closed fast and won the deal. That’s the power of hard money.

What Properties Qualify?

Hard money lenders focus on real estate that makes business sense. That means:

  • Fix and flips

  • Fix and rentals (like BRRRR properties)

  • Commercial properties

  • Non-owner-occupied real estate

If the deal makes sense and the asset protects the lender, it usually qualifies. These loans are not for primary homes or owner-occupied properties.

How Fast Can You Close?

Speed is one of the biggest advantages. Once the title and insurance are ready, many hard money loans close within a couple of days. Because investors often compete with cash buyers, that speed can make all the difference.

What Do Hard Money Loans Cost?

Hard money isn’t free, but it’s fast and flexible. Here’s what you can expect:

  • Rates: 10% to 14% (simple interest)

  • Points: 1 to 3% of the loan amount

  • Fees: Usually small, such as legal or doc fees ($500–$1,500)

You should never pay application or draw fees on a true hard money loan.

Repayment Terms

These are short-term bridge loans, typically lasting 6 to 18 months. Most don’t have prepayment penalties. So, if you pay it off in three months instead of six, you won’t get hit with extra fees. That flexibility gives you room to adjust your strategy and refinance when the time is right.

Does Credit Matter?

Yes and no. Hard money lenders don’t care about your credit score, but they do care about your credit history. They want to see that you pay your lenders on time. A quick background check will also show if you have liens or judgments that could cause issues at closing.

Think of it this way: credit scores don’t matter, but credit habits do.

How Much Can You Borrow?

That depends on the lender. Some use Loan-to-Value (LTV), while others use After Repair Value (ARV).

LTV lenders base the loan on what the property is worth today. ARV lenders look at what the property will be worth after improvements. Because of that, ARV lenders usually lend more and often cover part, or even all, of your rehab costs.

Example:
One investor bought a property for $155,000 and planned a $50,000 rehab. The ARV was $300,000. The lender covered 100% of the purchase and rehab costs. The investor only needed to cover closing costs. That’s the kind of leverage ARV lending makes possible.

How Do Draws Work?

Most lenders give a small amount upfront—usually 10% to 20% of the rehab budget, to get started. After that, funds are released in draws as the project moves forward.

To get a draw, you’ll submit receipts and photos showing completed work. Many lenders now use virtual inspections that take only 5–10 minutes. Once approved, funds are released within a couple of days.

Example:
An investor received $15,000 upfront for demo work. After submitting photos and invoices, a five-minute virtual inspection confirmed progress. The draw was funded within 48 hours. That’s how fast modern hard money lending works.

Red Flags to Watch For

Be cautious of anyone charging application fees or upfront money just to “see if you qualify.” That’s a big red flag. Most reputable lenders don’t charge these fees.

If a lender wants money before reviewing your project, walk away. Chances are, you’re paying for something you’ll never get.

The Application Process

Getting approved for hard money usually happens in two stages:

  1. You, the borrower – This includes a background and credit review, plus proof of funds for your portion of the project.

  2. The property or deal – Lenders look at your scope of work, exit strategy, and overall plan.

If both make sense, you’re good to go. Remember, hard money lenders want good deals—for both you and them.

Final Thoughts: Still Worth It in 2025?

Absolutely. Hard money loans remain one of the best tools for real estate investors who need speed, flexibility, and funding based on the property, not their personal finances.

They’re not for every situation, but when you find a great deal that needs quick action, hard money can help you win it.

Ready to Get Funded?

If you’re looking for a hard money loan, send us your deal and we’ll review it. Whether it’s your first project or your fiftieth, we’ll help you see if it makes sense, and get you funded fast.

Watch our most recent video to find out more about: Are Hard Money Loans Still Worth It in 2025?

SOS! Stuck in a Fix & Flip—Here’s How to Get Out

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SOS! Stuck in a Fix & Flip—Here’s How to Get Out

Today we are going to discuss SOS! Stuck in a Fix & Flip! Flipping houses can feel exciting—until it doesn’t. Sometimes a property just won’t sell for what you need. Stress builds. Bills pile up. And you start asking, what now?

The good news? You still have options. Let’s look at three ways to pivot and move forward.

1. Update It: Bring the Property Up to Market Standards

Buyers today want move-in ready homes. If your property looks unfinished or dated, they’ll move on to the next one.

Ask yourself:

  • Does the home need a new roof?

  • Are the floors worn out?

  • Could a kitchen or bathroom upgrade seal the deal?

  • Is the yard still bare or messy?

👉 Example: If your flip looks great inside but the landscaping is dirt and weeds, buyers might skip it. Spending a little more to finish the yard could push it to the top of the list.

When the market has plenty of choices, your property needs to shine brighter than the rest.

2. Bridge It: Buy More Time with a Short-Term Loan

Sometimes the problem isn’t the property—it’s the timing.

That’s where a bridge loan comes in. It can carry you from your current fix-and-flip loan into the next selling season. Most bridge loans last one to two years.

Before you bridge, check your burn rate:

  • Monthly loan payments

  • Taxes

  • Insurance

  • Utilities

👉 Example: If your property costs $3,000 a month to hold but you still have $50,000 in potential profit, bridging for six months could make sense—especially if rates drop or the market heats up.

But if your margins are too thin, it may be smarter to sell now, take a small hit, and move on. Sometimes limiting your loss is the best business move.

3. Turn It: From Flip to Rental

If selling isn’t working, consider turning the property into a rental.

Options include:

  • DSCR loan (Debt Service Coverage Ratio loan): Approval is based on rental income, not your personal income.

  • Conventional loan or bank loan: Great if you qualify and want long-term stability.

  • Short-term or mid-term rentals: Could generate strong cash flow depending on the area.

⚠️ Watch your listing price! Lenders often use the lower of the appraisal or listing price. Dropping your list price too low can hurt your refinance options.

👉 Example: One investor kept cutting her list price to $250,000. But when she applied for a DSCR loan, the home appraised at $330,000. Because lenders had to use the lower number, she couldn’t get the funds she needed. Keeping her listing higher would have opened better options.

Turning a flip into a rental might even be the push you need to start building a long-term portfolio. Rentals bring cash flow, tax benefits, and future wealth.

The Bottom Line

Every stuck flip has a solution. The key is to:

  1. Know your numbers.

  2. Check your stress level.

  3. Decide whether to update, bridge, or turn.

Real estate is a business. Sometimes it’s about maximizing profit. Other times it’s about limiting loss and keeping momentum.

Need a Second Set of Eyes?

If you’re stuck, don’t stay frozen. A quick strategy session could help you see your best path forward—whether that’s finishing updates, bridging into the next season, or refinancing into a rental loan.

Let’s clear your mind, clear the deck, and get you moving on to your next deal.

Contact us today to find out more!

Watch our most recent video to learn about: SOS! Stuck in a Fix & Flip—Here’s How to Get Out

How Escrow Can Make or Break Your Fix & Flip Investment

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Why Escrow Matters

Today we are going to discuss how escrow can make or break your fix & flip investment. In a fix and flip, escrow can be your best friend—or the thing that slows your project to a crawl. When you understand how it works, you can keep your rehab moving fast, avoid costly delays, and protect your profits.

What Is Escrow in a Fix & Flip Loan?

Escrow is the money your lender sets aside for repairs.
It’s there to turn an undervalued property into a market-ready one.

Example:
If you buy a home for $150,000 and budget $40,000 for repairs, the lender might escrow that $40,000.

Lenders want to be sure that money goes to the agreed repairs, not something else. That’s why they hold it in escrow instead of handing it to you all at once.

What Escrow Usually Covers

Every lender is different, but escrow most often covers:

  • Repairs and rehab work from your approved budget

  • Certain agreed costs, like insurance or utilities (if negotiated before closing)

Tip: Always get a clear list from your lender before you close. If it’s not in writing, don’t count on it being covered.

What Escrow Usually Does NOT Cover

Escrow funds are not for:

  • Your monthly loan payments (except in rare cases)

  • Surprises or changes you decide to make mid-project

  • Closing costs

  • Ordering materials ahead of time (pre-orders) unless installed and inspected

Example:
If you decide halfway through to add a deck or upgrade all the windows—without it being in your original budget—you’ll likely need to pay for it yourself.

Why Lenders Use Escrow

Lenders lend based on the property being market-ready. Escrow ensures the repairs get done as planned.
They’ll release the funds only after they confirm the work is complete—sometimes with an inspection or permits.

How Escrow Works Step-by-Step

  1. You do the work. Pay contractors or buy materials.

  2. You submit proof. Bills, permits, or inspection sign-offs go to the lender.

  3. They approve. The lender verifies the work is done.

  4. You get reimbursed. The money goes to you or directly to your contractor.

Note: Some lenders release 10–20% of escrow at closing, but most wait until work is verified.

The Role of Speed in Your Profits

Speed is everything in flipping. The faster you finish, the fewer payments you make, and the sooner you can sell.

Example:
If you finish in 3 months instead of 6, that’s 3 months of payments saved and extra time to start your next flip.

Surprises and Overruns

They happen—old wiring, bad joists, price jumps on materials.
If it’s not in your budget, you’ll need to cover it.

Pro Tip: Build a 20% cushion into your budget.
For a $200,000 purchase + rehab, that’s $40,000 in extra available funds.

This covers:

  • Loan payments during the project

  • Pre-orders for materials

  • Overruns and surprises

Without it, you risk delays while hunting for extra cash—turning a 3-month flip into 6 months or more.

One Step Before You Start Investing

Have your available funds ready before you buy. This might mean:

  • A line of credit

  • A HELOC

  • Business credit cards

  • A partner

  • Private money

Final Word: Treat It Like a Business

Escrow protects the lender, but your job is to protect your timeline and profits.
Know what’s covered, plan for what’s not, and have your extra funds ready.

Ready to make your next flip easier and more profitable?
Let’s talk about how to set up your funding so you can move fast and keep more money in your pocket. Contact us today to get started.

Watch our most recent video about: How Escrow Can Make or Break Your Fix & Flip Investment

💰 Want 100% financing, 100% of the time? Get a copy of my book, Money Buckets: The Millionaire’s Secret to Fix and Flipping: https://tcfcoach.kartra.com/portals/ThvALQYZJB9c 💰 Get my online course, 100% Financing, 100% of the Time: https://TCFCoach.kartra.com/page/pdx2086 💰 Download all our FREE real estate investing tools: https://hardmoneymike.com/investor-tools/

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!

Will Your Real Estate Investment Actually Make Money?

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If you want to succeed in real estate, you have to ask this question early:
Will your real estate investment actually make money?

Too many new investors skip the numbers. They get excited. They imagine the profits. But then… the deal doesn’t turn out like they hoped.

Let’s change that.

Real Estate Is a Numbers Game — Not an Emotional One

Think of real estate like baking. It’s a recipe. You follow it, step-by-step. If you get the right ingredients in the right amounts, you end up with something great.

The key is knowing your numbers before you buy.

Because if you wait until after… it’s often too late.

Example: A Real Flip Deal Breakdown

Let’s say you’re buying a property for $150,000.
You plan to put $75,000 into renovations.
And you expect to sell it for $300,000.

That sounds like a $75,000 profit, right?

Not so fast.

There’s a lot more to it. Here’s what most people miss:

The Hidden Costs You Have to Know

Even when the top-line numbers look good, deals fall apart when you forget the real costs.

Here’s a quick list of what you should always include:

1. Realtor Fees

Usually around 5% when you sell. On a $300,000 sale, that’s $15,000.

2. Loan Origination and Carry Costs

Lenders charge fees to set up the loan. Then you pay interest while you hold the property. For this example, let’s say that’s $18,000 total over 6 months.

3. Title Costs

You pay this when you buy and again when you sell. Around $1,500 total is a safe estimate.

4. Insurance

You need coverage during the rehab. That’s about $1,800 for builder’s risk insurance.

So What’s the Real Profit?

Let’s do the math again.

  • Purchase Price: $150,000

  • Rehab Budget: $75,000

  • Total In: $225,000

Now subtract the real costs:

  • Realtor Fee: $15,000

  • Loan + Carry Costs: $18,000

  • Title Fees: $1,500

  • Insurance: $1,800

That’s $36,300 in extra costs.

So your actual total is now around $261,300.
And if you sell for $300,000, your real profit is about $38,700.

Still a great deal — just not the $75K you hoped for.

Why This Matters Before You Buy

This is why you need to ask:
Will your real estate investment actually make money?

Too many people focus on just two numbers: what they buy for and what they hope to sell for. But that’s only part of the story.

You must factor in all the other costs. Only then can you know if the deal is worth your time, energy, and money.

A Quick Tool to Help You

We built a simple tool called the Quick Deal Analyzer. You can download it for free at HardMoneyMike.com.

It walks you through:

  • Purchase price

  • Rehab costs

  • Loan terms

  • Realtor fees

  • All the sneaky costs most people forget

This tool helps answer that key question:
Will your real estate investment actually make money?

Final Thoughts: Follow the Recipe

The best investors don’t just hope for profits. They plan for them.

They run the numbers before they ever sign a contract. And they aim for deals with at least 10% to 15% profit, even after all the costs.

So if you’re asking yourself, “Will your real estate investment actually make money?” — now you have the tools to find out.

Keep it simple. Stick to the recipe. And go build the future you want.

Watch our most recent video to find out more!

The 100% Financing Strategy Every Real Estate Investor Should Know

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Let’s walk through The 100% Financing Strategy Every Real Estate Investor Should Know — a method that combines your lender with other smart tools to fully fund your deals.

What Is “100% Financing,” Really?

You’ve probably heard lenders say, “We’ll cover up to 75% of the ARV.”

That sounds great… but it’s not true 100% financing.

Why? Because it usually only covers:

  • The purchase price

  • Some or all of the rehab

But what about everything else?

Let’s Look at a Real Example

Say you find a property that will be worth $200,000 after repairs.
You’re buying it for $110,000 and putting $40,000 into repairs.

That adds up to $150,000 — and yes, a lender might cover that.

But here’s what they don’t cover:

  • Closing costs (title, insurance, origination)

  • Escrow advances for rehab

  • Upfront contractor payments

  • Materials (windows, doors, appliances)

  • Holding costs (mortgage, taxes, HOA)

  • Surprise repairs or last-minute changes

  • Staging, cleaning, or listing prep

See the problem?

Even with a great loan, you still need extra funds on hand — and that’s where the credit stack comes in.

The Secret to True 100% Financing? Your Credit Stack

The 100% Financing Strategy Every Real Estate Investor Should Know isn’t just about a lender.

It’s about stacking other money tools as well as your loan, like:

  • A HELOC (home equity line of credit)

  • A business line of credit

  • Business credit cards

  • OPM (Other People’s Money)

  • A private partner

This stack fills the gaps so you can:

  • Move fast

  • Keep your projects on schedule

  • Avoid costly delays

  • Take on more deals without stress

Best of all? These tools often don’t cost you anything unless you use them.

Why Speed = Profit

Every day a deal drags, your profits shrink.
That’s why successful investors always keep funds ready.

Let’s say a contractor needs $5,000 upfront to start.
If you wait 10 days to figure it out, your project stalls.
Now it’s not a 3-month flip — it’s a 6-month flip.

That delay costs you:

  • More interest

  • More taxes

  • More stress

  • And maybe even the next great deal

But if you have your credit stack set up? You fund it, keep the job moving, and finish strong.

How to Set Up Your Own Stack

Everyone’s stack looks a little different. Here’s how to start building yours:

First, Start with your main lender

  • Hard money can fund up to 75% of the ARV

Second, Add a HELOC or line of credit

  • Use this for materials, escrows, or delays

Third, Get a business credit card

  • Great for contractors or emergency purchases

Forth, Tap into OPM or partnerships

  • Know anyone with $20K–$50K sitting idle? Give them a better return than the bank.

Finally, Keep it all ready — not running

  • These should be available, not maxed out

What Happens After the Flip?

Here’s the smart part:
When you sell the property, you pay off everything — including your credit stack.

You’re not adding more debt.
You’re just using tools temporarily to get your project across the finish line.

Let’s Recap

The 100% Financing Strategy Every Real Estate Investor Should Know comes down to this:

✅ Use a lender for the purchase and rehab
✅ Stack other tools to cover the rest
✅ Set everything up before you start
✅ Move fast, reduce stress, and stay profitable

If your money is ready, your deals will go smoother — and your profits will grow.

Ready to Build Your Stack?

We’ve helped thousands of investors set this up.
Download our free guide, grab your spot in our upcoming workshop, or reach out with questions.

Visit Hard Money Mike
Or email us at info@hardmoneymike.com

Let’s get your money lined up — so you can focus on finding great deals and making real progress.

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!

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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!