What is Hard Money?

Hard money is, simply put, money that is backed by a “hard” asset. Individuals and companies often turn to hard money lenders when capital is required to bridge assets or rapid funding is required.

At one time, hard money was thought to be synonymous with back-alley dealings with less-than-stellar individuals offering loans in exchange for 50 percent of your business, or your first born, whichever was worth more. Fortunately, that misconception is long gone. The truth is that many contractors, developers, businesses and even home owners turn to these types of loans for various purposes and in a wide variety of circumstances. These are some of the most common reasons people turn to hard money loans.

· The time to funding for a traditional lender can be painfully slow, taking up to several months in some instances. For real estate investors, contractors and developers, this time lapse could lead to missing out on that one-of-a-kind property that just hit the markets and is perfect for a build-out, rent and hold or their next fix and flip. Time is of the essence in some real estate dealings. This type of loan also allows real estate investors to move on to their next project while waiting for traditional funding or to obtain a traditional loan after the rehab has taken place.

· Home owners often find the home of their dreams before their previous home sells. In today’s market, a contingent offer based on a sale often takes a backseat to an offer without any contingencies. A hard money bridge loan can provide these individuals the capital they need to purchase their new home instead of waiting for their previous home to sell. This type of loan acts as a bridge from one asset to another, is backed by collateral, and often funds in less than a week.

· If you have negative items on our credit report or are self-employed, making it sometimes difficult to prove your income, this type of loan can be easier to obtain than a traditional loan. These lenders are more concerned with the collateral or hard asset that you will be using to back your loan. They will also want to know your exit strategy, or how you plan on repaying them once the project is completed.

A Few More Facts about Hard Money Loans

Hard money loans are usually short-term loans, anywhere from 3 months to 5 years. Because these types of loans are often funded by private individuals, they do not have to adhere to the same restrictions and regulations that banks do, making these lenders more flexible and often easier to work with. The loan-to-value ratio varies widely among lenders and is usually somewhere in the range of 50 to 70 percent.

At Level 4 Funding, we work with hundreds of private hard money lenders who choose to invest in varied projects based on their interests.

Because of our rolodex of investors, we can often find the right investor for your project with the best rate possible. Call us today to discuss your needs and for a no-obligation quote.

Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.