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Updated about 7 years ago on . Most recent reply
![Jessie Creighton's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/890048/1621505058-avatar-jessiec9.jpg?twic=v1/output=image/crop=1066x1066@182x0/cover=128x128&v=2)
I'm confused on how this hard money lender thing works?
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![Matt Shields's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/442057/1721762288-avatar-mattherat.jpg?twic=v1/output=image/crop=2116x2116@0x13/cover=128x128&v=2)
Unlike traditional mortgage lenders, hard money lenders are like commercial lenders, they lend based on the property's value and the deals numbers, unlike a mortgage lender who looks at property value but is primarily lending to your income, credit, and history. Some hard money lenders do consider income/credit, but none has ever asked for mine.
Think of hard money like a pawnshop. You need short-term money now. The pawnshop doesn't care about who you are, just what the item is worth, and can they get their money out of it if you default.
So it is difficult for a hard money lender to give a blanket pre-approval letter without property, although after you have completed a few loans on time and earned their trust, I could see a hard money lender providing this. Remember that they are all different and range from large companies with thousands of loans to the guy on craigslist.
Before I purchase a property, I explain my general business model to the lender, make sure that it is something that they are interested in and they have the funds needed. I also keep a couple of lenders in the on-deck circle just in case the primary craps out. Once you find a deal a hard money lender should be able to react quickly getting you a pre-approval letter and funding. I have money within 24 hours. Good luck.