What is Hard Money Loan?

A hard money loan is a short-term, asset-based loan from private lenders or companies rather than banks. Qualification is based on the property value (the asset) rather than the borrower's credit or income. Hard money loans have higher interest rates (10-15%) and shorter terms (6-24 months) but close fast and work for properties that banks won't finance.

Formula
Max Loan = ARV × 65-75% (or Purchase Price × 80-90%)
Good
Closing in 7-14 days when speed matters
Great
Using hard money to acquire, then refinancing to conventional
Watch For
High rates (10-15%) and short terms mean you MUST have an exit strategy
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