What is a “Hard Money” loan? That’s a good question, but contrary to a popular myth it’s not because it’s “hard” to get. Traditional real estate loans like a personal mortgage are based the borrower’s personal ability to repay the loan. This is measured by things like personal earnings, debt to income ratio, and credit score. These are all intangible or “soft” assets. Hard money loans, on the other hand, are based on a “hard” asset or the value of the property, so we don’t ask for documentation of income or any of that messy stuff. We will do a soft pull on your credit and it may have an impact on rates, but it will never prevent you from getting a loan.
I’ve done deals with these guys and they are conservative with their estimates because if you aren’t you will surely lose money. I’ve done 4 rehabs, 2 with them and 2 with other lenders, and the two I did with them I actually made money, while the two I’ve done with other HMLs I lost money…they want to ensure that they’re not putting you or them in a bad position.