What Are Hard Money Loans?

by | Mar 15, 2019 | Financing and Loans

Hard Money Loans: The Hype is Real, and Here’s Why

Since 2008, hard money has been shaking up the investing scene. It’s got some folks scratching their heads, while others swear by it. So, what’s the deal with hard money loans anyway? Think of them as the “get it done now” financing for investors. They’re not so much about your perfect credit score; they’re about the property’s potential

Intrust Funding: Your Washington Hard Money Partner

Here at Intrust, we’ve funded over 1,500 loans since 2008. Our less than 1% default rate proves we’ve got an eye for winning deals. How do we do it? In-house underwriting – we make the decisions, fast and accurate.

We believe hard money is for short-term investment projects, primarily non-owner-occupied properties. Got a flip with great profit potential? That’s where we come in. But remember, any investment has risks. Hard money’s power is in those short-term projects with a clear path to profit. It’s NOT a long-term hold strategy.

How Hard Money Makes Your Deals Happen

Think of fix-and-flips. With hard money, you can:

  • Snag a property quickly, beating out slower buyers. My bank takes forever – how’s this different? Hard money is FAST. We look at the deal, the value, not piles of paperwork. We’re talking days, not months, to close a loan.
  • Fund renovations to boost the value.
  • Sell for a profit because that after-repair value (ARV) is way higher than what you put in.

The Numbers: Less Talk, More Profit

Okay, I’m interested, but what’s it gonna cost me? Every lender’s different, but hard money ain’t gonna have the same rates as your 30-year mortgage. That said, the speed and flexibility can be worth it if the deal is solid.

Hard money lenders use loan-to-value (LTV) ratios – a typical range is around 65%. That means on a million-dollar property (after it’s fixed up), you might get a $650,000 loan.

Example: Turn a Dump into a Goldmine

You find a $100,000 fixer-upper in a hot neighborhood. Needs another $100,000 in renovations. We get you funded FAST so you beat out the competition.

Our team sees it could sell for $300,000. With a 65% LTV, that’s up to $260,000 for purchase AND renovations. You sell and walk away with a hefty profit!

Hard Money is About Partnership, Not Predatory Lending

Intrust Funding sees borrowers as partners. That’s why we’re big on transparency and only fund deals that make sense for YOU. Do I need a million bucks or can I start with a smaller deal? We work with a range of deals – gotta see the numbers, of course. Reach out and let’s chat about what you’ve got in mind. I’m all about speed, how fast are we talking here? If the deal’s got legs, we’re known for getting you that cash way faster than your average bank could ever dream of.

With our Washington expertise, we’re invested in helping you build a successful real estate business, one deal at a time. You mentioned flips, but do you guys have a sweet spot – are you better with certain types of properties? Experience matters! We know the ins and outs of the region, so yeah, we definitely have an eye for certain kinds of deals.

Ready to get started? Fix-and-flip is the obvious one, but how else could I put hard money to work? Let’s think beyond the single-family house. Smaller multi-family properties, even some creative commercial projects – with the right numbers, hard money could be the catalyst. But, gotta ask – when would I be better off NOT using hard money? If a long-term hold is your game, traditional financing might be the smarter move. Also, if the deal just doesn’t have a clear profit path, hard money ain’t a magic wand. You’re great, but I’d like some options. How do I find other good hard money lenders near me? This ain’t a one-size-fits-all market. Talk to fellow investors, get referrals, and do your research. A good lender is a serious asset, so it’s worth putting in the time to find one that clicks.

 

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