How do hard money loans work?

Hard money loans are short-term loans for real estate investors. Using equity in other properties, or the investment property itself to secure the loan, hard money loans are typically used for a 5-12 month period to fund property acquisition, renovation costs, or both. As opposed to a conventional loan from a bank, a hard money loan is not contingent on the borrower's credit, but rather on the after repair value (ARV) of the investment property.