HARD MONEY CAN BE EASY MONEY FOR YOUR REAL ESTATE DEALS TAMERA ARAGON
A Hard Money Loan may also be referred to using
the acronym HML.
One of my most popular sayings in real estate
investing is “the bottom line is the bottom line”
(Hence, the name of my favorite tool found here. So,
if the cost of hard money has been accounted for in
your deal, then hard money is an excellent resource
funds, etc. Interest rates and points on such loans
for cash that does not need you to have good credit.
are usually much higher. Terms can range from 3 to
60 months and percentage rate varies greatly.
The important take away from this article is this…
DON’T LET LACK OF PERSONAL FUNDS KEEP
Hard Money loans have one basic requirement.
YOU FROM MAKING MONEY IN REAL ESTATE
There has to be some substantial equity in the
TODAY.
property to give the lender a reason to invest their
Your lack of knowledge and experience
may be a valid reason, but lack of funds is not.
funds in an otherwise risky venture.
To gain knowledge on how to do deals, making
Why do they call it “hard money”?
money without using ANY of your own money to buy,
I want to invite you to apply for my personal training
It is difficult to find an answer to this question. I’ve
and mentoring program HERE.
heard plenty of speculation. Some people say that
it’s because the money is used for “hard to do”
What is a Hard Money Loan?
loans. Others say it is because the loans are “hard
to get” or “hard to pay.” It is my belief that it is called
Hard money loans are collateral-based real estate
hard money because traditionally it has been “real
loans made by private investors instead of banks.
money” in the sense that it is not borrowed.
These loans fill a need for funding when banks won’t
Institutions loan borrowed money, and in this sense
lend for any reason… there are credit problems, or
they loan “soft money.” However, I must point out
there isn’t time to obtain conventional financing to
that things have changed a bit over the years, and
secure a purchase or get cash from the equity in a
these days a good deal of hard money is in fact
property. These types of loans are referred by
borrowed. (I would guess as much as 50%.)
different names such as hard money loans, private
money loans, private equity loans, or bridge loans.
What is hard money used for?
Hard Money” loans or “equity loans” as they are
Hard Money is generally used as a bridge: a way to
sometimes called refer to non-conventional real
get from point A to point B. It is generally a short to
estate loans. They are usually funded by private
medium term solution (1-6 years), and there is
money sources and investors, (not banks), pension
nearly always an exit strategy going in.