Hard Money Loans
A hard money loan is an asset-based loan where the borrower receives funds secured by real estate. Hard money loans are typically issued by private investors or companies. Interest rates are typically higher than conventional commercial or residential property loans because the risk is higher.
This hard money loan is typically done for an investor that needs to close the loan quickly. They can close in as little time as 5 days. It can also be used to bail out a foreclosure. Most loans are one year but can go as long as three years. In most cases credit score is not a determining factor to obtain the loan, It is based on the property and the loan is approximately 65 to 70 loan to value. Points and interest rates are higher then a typical loan.
Hard Money Program Details:
- Underwriting: We underwrite the investment itself, not the borrower. As such, we don’t review the borrower’s financials, credit score, income history, etc. We underwrite in-house based on both the present and future value with no appraisals or formal inspections required.
- Speed: Due to our underwriting systems and asset-based approach, we’re able to prepare approved loan terms the same day and close within 24 hours. In other words, our debt is widely regarded to be as strong as cash.
- Terms: Our debt is high leverage, interest only, short term, with no pre-payment penalties or hidden fees. Specific terms vary on a deal-by-deal basis; however we can finance up to 90% of purchase, up to 100% of rehab costs, rates as low as 8.99%, and the only fee we charge is ½ to 1 point for residential properties.
We also offer a range of longer term and lower interest rate options for rentals. Below is what we can do for your deal:
Residential:
We are now lending up to 90% of the purchase price on residential properties that qualify. On acquisition only financing we are currently offering rates from 8.99%-10.99%. Our fee starts at ½ point for a 6 month term, and 1 point for 12 months.
We can also offer acquisition and rehab financing of ~80% of the purchase price & 100% of the rehab costs, which will be set up as a draw. Interest rates range from 8.99%-10.99% with 1 upfront point on a 12 month term.
Here is a quick list of the items we would need in order to get you an official quote.
- Purchase/Assignment Contract
- Current Photos of the Property (interior & exterior) if there aren’t photos on the MLS, Zillow, etc
- Line-Item Rehab Budget
- Completed Application
Commercial:
On commercial deals, we can fund up to 85% of the purchase price for multi-family, and 80% for other commercial asset types. Typically, you will see an interest rate of 8.99%-11.99% with +/- 2 upfront points. We offer 6, 12, & 24-month loans.
- Purchase Contract
- Current Photos of the Property (interior & exterior) if there aren’t photos on the MLS, Loopnet, CoStar, etc.
- Recent Appraisal or BPO (if there is one available)
- Rent Roll
- P&L
Example Commercial Hard Money Loan Scenario
Example A:
A Denver investor identifies a small 10-unit multifamily building listed for $1,000,000 that needs light renovation before stabilizing rents. Traditional lenders won’t approve the deal quickly enough, so the investor turns to a hard money loan for speed and flexibility.
- Purchase Price: $1,000,000
- Loan-to-Value: 85%
- Loan Amount: $850,000
- Down Payment: $150,000
- Interest Rate: 9.75%
- Term: 12 months
- Points: 2 (=$17,000 upfront)
The investor uses the 12-month loan to acquire the property, complete $100,000 in renovations, and stabilize occupancy. Once rents increase and financials improve, the property appraises for $1.4 million. The investor then refinances into a conventional loan at a lower long-term rate, paying off the hard money lender.
This example shows how a hard money loan can bridge the gap between purchase and permanent financing, helping investors close fast, add value, and exit profitably.
Example B:
A Colorado investor has the opportunity to purchase a vacant retail strip center in Colorado Springs for $750,000. The property has solid traffic exposure but needs tenant improvements and updated signage before it can generate income. Traditional lenders decline due to the property’s current lack of occupancy, so the buyer seeks a hard money bridge loan to close the deal quickly.
- Purchase Price: $750,000
- Loan-to-Value: 80%
- Loan Amount: $600,000
- Down Payment: $150,000
- Interest Rate: 10.5%
- Term: 12 months
- Points: 2 (=$12,000 upfront)
Within eight months, the investor renovates the units, secures two long-term retail tenants, and signs new leases producing a net operating income of $80,000 annually. The improved financials allow the property to appraise at $1.1 million, enabling a refinance with a conventional commercial lender at a lower rate and longer term.
This example highlights how a hard money loan can act as a short-term bridge, enabling investors to move fast on underperforming assets, complete improvements, and transition to stable, bank-qualified financing once the property’s income supports it.
