A Hard Money Loan is a Bridge Loan which is a short-term loan secured by real estate. This type of loan is used to finance a property until permanent financing is found, the home is resold, or the home is rehabilitated and then resold. They are funded by private investors (or a fund of investors) as opposed to conventional lenders such as banks or credit unions. The terms are usually around 12 months. The loan requires monthly payments of only interest or interest and some principal with a balloon payment at the end of the term.
Real estate investors choose to use Hard Money for many different reasons. The main reason is the ability of the Hard Money Lender to fund the loan quickly. In most situations, hard money funding usually takes between 3 to 4 weeks.
The ability to obtain funding at a much faster rate than a bank loan is a significant advantage for a real estate investor. Especially when the real estate investor is trying to acquire a property with many competing bids, a quick close with a Hard Money Loan will get a seller’s attention and set their offer apart from the rest of the buyers offering slow conventional financing.
Property investors who fix and flip properties are the most common customers of Financing Hard Money, LLC.
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