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  • Writer's pictureMorgan Sterling

Hard Money Lending: It’s Not What You Think

Updated: Dec 1, 2023

Money Lending

Hard money loan.  Three words that have the ability to ignite a flurry of emotion in many prospective homeowners. In the years of the market crash, there were some less than ideal hard money lenders that targeted borrowers by handing out risky loans using real estate as collateral, with the intention to foreclose on the properties.  These predators no longer exist in the current market, but their reputation still lingers in the minds of investors, causing them to take pause before using hard money lender’s services.  This begs the question, where can investors find a qualified, experienced hard money lender to go into business with? Also, what exactly are these hard money loans all about?

The search for a reputable hard money lender may seem daunting, but in reality it is much easier than investors think! No matter what city you call “home,” there are real estate investor clubs and meetings.  These meetings are generally filled to the brim with respectable hard money lenders that are in search of trustworthy borrowers to develop a partnership with.  If you happen to stumble into a meeting where there isn’t a hard money lender in sight, there will be numerous real estate agents who will undoubtedly have solid contacts, and will be able to provide you with hard money lenders they would recommend.  Compiling a list of hard money lenders is key, it ensures that you will find a lender that is the perfect fit for you and your future projects!

So what exactly are these hard money loans that you would be signing up for with lenders? Hard money loans are specific types of asset-based loan financing, a borrower receives funds secured by real property. These loans are funded by private investors, rather than the traditional types of loans that are funded by banks and credit unions.  The loans generally last for twelve months, and the borrower makes monthly payments. The amount that the hard money lender lends the borrower, is based upon the value of the property.  This property is one that the borrower is already in possession of and desires to use as collateral, or it can be the property that the borrower is in the process of buying.

For more information on hard money lending, check out Don Hensel’s article “Hard Money 101: Everything You Need To Know About Getting Started With Hard Money Loans” on

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