Hard Money Loan

Real Estate

A hard money loan is a short-term loan from a private lender secured by real estate, used primarily by real estate investors for flips, BRRRRs, or bridge financing. Terms: 6-24 months, 8-15% interest, 1-5 points origination fee, often 65-75% LTV based on after-repair value. Faster underwriting than traditional loans (days vs. weeks), less documentation, asset-based qualification. Designed for short-term hold; long-term carry costs unsustainable. Standard refinance to conventional loan once property stabilizes. Hard money allows investors to compete with cash offers and execute on opportunities banks can't fund in time. Loan defaults are common; the lender's downside protection is the property.