What do investors ask about hard money?
What is a hard money loan?
A hard money loan is short-term, business-purpose financing secured by investment real estate, typically used to buy and renovate a property before refinancing or selling it. Qualification focuses on the property, the scope of work and the exit, rather than on personal tax returns.
How do hard money loans work?
A lender reviews the property, the purchase price, the renovation budget and the projected after-repair value, then structures a short-term loan with an exit. Many loans include a renovation draw schedule, where funds are released as work is completed and inspected. See how hard money works.
What is after-repair value (ARV)?
ARV is the estimated value of a property after its planned renovations are complete. For fix-and-flips, lenders use the ARV to size the loan. The estimate comes from a valuation of the property in its repaired condition. See the after-repair value guide.
What can I use a hard money loan for?
Fix-and-flip purchases, bridge financing while you sell or refinance, BRRRR acquisitions and ground-up construction. The property must be non-owner-occupied investment property.
Do I need a down payment for a hard money loan?
Hard money loans generally require some borrower funds in the deal, and the amount varies by lender and by the specifics of the property. Each lender sets its own structure, so the answer depends on your scenario.
Can I get a hard money loan in an LLC?
Usually, yes, with personal guarantees from the members and entity documents in good standing. See the LLC hard money guide.
How does a hard money lender decide the loan amount?
For a fix-and-flip, the lender looks at the purchase price, the renovation budget and the projected ARV. For a bridge or refinance, it looks at the property value and the exit plan. The structure depends on the specific deal.
Can I refinance a hard money loan into a DSCR loan?
Yes, that is a common exit. Once a property is renovated, rent-ready or leased, you can often replace the short-term loan with a long-term DSCR loan qualified on the rent. See hard money to DSCR refinance.
What is a DSCR loan?
A DSCR (debt service coverage ratio) loan is a long-term business-purpose loan that qualifies on whether a rental’s rent covers its full monthly payment. It is the usual takeout for a property that has moved out of hard money. See DSCR loans.
Can I live in a property financed with hard money?
No. We arrange business-purpose financing for non-owner-occupied investment property only. If you or any family member will live in any unit, we cannot take the request.
What is BRRRR?
Buy, rehab, rent, refinance, repeat. You buy with short-term money, renovate, rent the property out, refinance into long-term financing and use the proceeds to fund the next deal. See BRRRR financing.
What is a bridge loan?
A bridge loan is short-term financing that covers a gap, often between buying a property and its longer-term financing or sale. It is secured by the property and repaid when the exit happens. See bridge loans.
Do you publish hard money pricing?
No. Pricing depends on the property, the scope of work, the borrower, the loan size and the market on the day it is priced, so we quote only after reviewing your scenario.
Are you a lender?
No. Loan Daddy LLC (NMLS #2827624) is a mortgage broker, not a lender. We arrange and shop financing from wholesale lenders, including private and hard money lenders, who underwrite and fund the loans.
What does a broker do on a hard money loan?
We review your scenario, compare how several wholesale lenders would treat it, help you assemble the documents and coordinate the file through closing with the lender you choose.
Is hard money only for experienced investors?
No. Some programs work with first-time investors, though lenders may add conditions or require more borrower funds in the deal. The property and the plan matter most.