HARD MONEY LOANS
Short-term fix & flip loans designed for speed and profit
What is a Hard Money Loan?
Hard money loans are short-term loans backed by property. With a regular mortgage, banks check your “soft” qualifications, such as your credit history and debt-to-income ratio. Hard money lenders look at the profitability of the deal that you bring them.
They are used primarily by real estate investors. Hard money lenders have looser requirements, and therefore can lend on fixer-upper properties that a traditional bank would likely pass on.
Because they are short-term loans (usually 5-12 months), hard money lenders require higher interest in order to make the risk worthwhile. However, hard money lenders fund deals much faster, a key reason they’re popular with real estate investors.
To see a a complete list of states we lend in, visit our Where We Lend page.
Hard Money Lender vs Conventional Lender
Length of Loan – Hard money lenders typically have loan terms of 5-12 months, and occasionally up to 24 months for big projects. Do Hard Money’s loan term is 5 months. A conventional lender, like for the mortgage on your house, will usually be a 30 year term, but with options for 15 or even 5.
Interest Rates – Hard money lenders typically charge 8% – 15% in interest rates. Conventional loans are much cheaper because they are collecting interest on your loan for much longer. Rates fluctuate, but they are often between 3% and 5% on the high side.
FHA Guidelines for Lender – This is an important point. The FHA (Federal Housing Administration)
Speed to Funding – Conventional loans usually take around 45-60 days to close, while a hard money lender can often close in 10-15 days.
Loan Requirements – Hard money lenders can decide on their own hard cash loan requirements, but they usually have less strict credit requirements and don’t look at your income, job history, or debt. As long as you have a deal with profit potential, you can likely get a loan. A conventional lender is interested in your ability to pay month after month for 30 years, so naturally they’ll look at credit, income, debt, etc.
Hard Money vs Private Money
Private money lenders are typically individuals that lend on a wide variety of investments, not just real estate. Since it’s usually an agreement between you and a single person, you can create whatever terms make sense for both parties.
Hard money lenders are real estate focused, and are offered by companies. They’ll have lending requirements, standard loan options, and set interest rates. However, they’ll usually have more structured support and resources to help you throughout the deal.
Common Hard Money Loan Costs
- Origination Fee
- Broker Fee
- Application Fee
- Underwriting Fee
- Document Prep Fee
- Processing Fee
- Funding Fee
Those are fees that are usually required up front, and then during the loan you’ll have interest and extension fees (if applicable) to pay.
However, Do Hard Money does not require any payments during the 5-month hard loan term. This helps investors with less cash on hand to make it through the deal and pay the interest out of the profit.
Furthermore, 37% of deals we lend on require $0 cash-to-close. This means that the loan amount covers those fees listed above, and no money is required out of pocket except for earnest money, loan extensions, or any cost overruns in the rehab.
Deal Types Funded with Hard Money Loans
Fix and Flip – These are by far the most common type of deals funded with hard money loans. You can get funding on rundown properties that a conventional loan wouldn’t touch. Read more about fix and flip deals with Do Hard Money here.
BRRR – Buy, Rehab, Rent, Refinance. Once you complete the rehab, you’ll find a renter and refinance the loan with a conventional lender instead of selling the flip. It’s a cost effective way to get a fixed-up rental property. Read more about BRRR deals with Do Hard Money here.
Wholesale – Wholesale deals don’t require you to receive funding, but the person you assign the contract to likely needs hard money. We can help facilitate wholesale deals by sending your deal out to our buyers list. Read more about Wholesale deals with Do Hard Money here.
Why Choose Do Hard Money
You’re a First-Time Flipper
No other lender makes it easier for a fix and flipper with no experience to get funds. We don’t require any previous flips in order for you to get started. We also don’t have a credit score requirement and with our 100% financing loan, you can complete deals with $0 cash-to-close.
We also assign a Loan Advisor to you so you have a single point of contact about your deal and funding for it. You’ll also have a dedicated Project Manager assigned to help you through the rehab project. All of our PMs are former general contractors who can help you keep the project on budget and on time.
You Want to Minimize Your Risk
Put simply, we’ll keep you out of bad deals. Our 2-step evaluation process starts with a Desktop Evaluation. A member of our team will pull up property details, pictures, the neighborhood, and good comps. They’ll determine a likely after repair value (ARV) for your property.
If the numbers make sense, we’ll send your deal over to a local, 3rd party expert who knows the area to put together an ARV as well.
All of this means that if the deal is a bad one, it’s unlikely to get through our rigorous screening process. That means less time and money lost on bad deals and more resources you can put towards the good ones.
You Want Loan Flexibility
With over 30 loan programs to choose from, we can find the option that works best for you. Whether your goal is lowest cash-to-close, most profit, or lowest interest rate, we’ll make sure you get just what you need.
You Want Resources to Make Finding & Closing Deals Easy
We realized a long time ago that everyone benefits if we do everything we can to help you find deals. That’s why our CEO—longtime fix and flipper Ryan G. Wright—put together the world’s foremost system for real estate investors.
With over 100 training videos, dozens of downloadable resources (like scripts and postcard templates), and 5 pieces of software, we can help anyone become a successful flipper. Our Investor’s Edge software has been especially useful, with its database of over 160 million properties and your ability to easily sort these into lists of likely fix and flip candidates. With a few more clicks, you can send them all postcards.
Even our experienced investors love how easy it is to find deals with our program. You can read more about the Find-Fund-Flip System here.
Loan Rates and Details
- No minimum credit score
- No experience required
- Up to 100% financing
- Interest rates beginning at 12%
- Origination as low as 3.5%
- Lend up to 75% ARV
- Loans up to $350k
- No prepayment penalties
- No payments for 5 months
Choose Do Hard Money
Investors choose us because they see that we want to help you, no matter your situation, succeed at real estate investing. Many come because they are excited about our 100% financing program, but then stay for multiple deals because of our commitment to them.
Between our deal-finding software, low-barrier funding, and dedicated team members, you won’t find another lender who makes it easier to find and close profitable deals, period.