Hard money loans are expensive, designed to be short-term loans, and have loan amounts that are typically higher than conventional loans.
Loan Amount Calculation
Purchase price = $50,000
Rehab budget = $20,000
Total capital = $70,000
ARV = $100,000
70% of ARV = $70,000
Sources of Hard Money
- Specialized Hard Money Lenders
- Individuals or group of individuals
- Mortgage pool or investment fund
- Self-directed IRA
- Understanding the role of the “Loan Broker”
Right Situations for Using Hard Money
- “Distressed” properties
- When speed counts
- When used as a “bridge”
- For taking a “cash-out”
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