Tag Archive for: profits

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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Real Estate Investing for Beginners: The 15% Rule

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Over the next few weeks, learn more about real estate investing for beginners. Today we’re looking at the 15% rule…

How can you tell if a deal is “good” or not?

Here at Hard Money Mike, we have a few ‘rules’ that help you make those tough decisions. Not only do these guidelines help you make money as an investor, but they also make you more attractive to lenders. 

So what does a good deal look like?

1. Profit

It all starts and ends with profit.

Every deal should have a minimum of 10% profit for you. However, as a rule, it’s best to aim for 15% of the ARV. This means that the selling price is a minimum of 10%–15% higher than the ARV (After Repair Value).

For example, if the estimated ARV for a property is $200K, you should look for deals that will get you about $30K in profits.

You’ll need to keep in mind other final costs to make sure that 10%–15% actually ends up in your pocket.

2. Cost to Sell

How much is it going to cost to sell the property? Typically, you see costs somewhere between 4%–6%.

Part of that is real estate cost, but hopefully you find a good deal with an agent. You’ll also need to factor in closing costs.

3. Cost to Fund

Leverage costs money. Loans come with interest, and you’ll be using the incoming money from your deals to pay those off.

Typically, you can estimate that your money costs 5%–6% more than the amount of the loan itself.

What do All These Numbers Mean?

When we add together these estimates, we end up with a range:

19%–27% of the cost of your project will not be funded by any of your loans. These costs all come out at the end, but it’s very important that you don’t wait until the end to think about them.

Typically, lenders look to give you 70%–75% of the estimated ARV of the property. Lenders do this because they want to make sure you have accounted for all these other numbers.

You need to know your profits, what it’s going to cost to sell, and the cost of your money. None of these numbers are financed into your loan so they’ll need to come 1) out of the sale, or 2) out of your pocket. 

The Lender’s Perspective

Lenders want you to demonstrate that you understand the costs. If you can show that you have a plan to cover these final costs, lenders are typically fairly comfortable covering between 70% and 75% of the ARV.

You may find hard money loans willing to go higher, but if you’re looking at traditional loans, expect 70%–75%.

If you have the funds in your money bucket, the lower the loan, the higher your profits (and the easier it is to get that 15%!). Anything above 75% and it gets trickier for you to make money on a deal because you’re needing to focus so much of your money on paying back lenders.

Diving Deeper

Over the next few weeks, you can stay tuned on our website or check out our YouTube channel where we’ll be going over more tips on real estate investing for beginners.

Real estate is an investing game. It’s a numbers game. If you have some numbers you want to run by us, just reach out to Info@HardMoneyMike.com or fill out a contact card.

Our goal is to equip you with the tools and knowledge to help you successfully build wealth.

Happy investing!