Investing with Hard Money Lenders

[Raquel Sayago]

My husband and i want to invest with little to no money down. We are looking into Hard Money Lenders and would love to hear the good,the bad? Any experiences and/or advice anyone could give us would be appreciated. Thanks you all so much!!! 

[Matthew G.]

@Raquel Sayago If you don't have a prior relationship with a hard money lender, you may not be able to get no money down. You should be able to get by with little down if you have a good deal though, they just want you to have some skin in the game. Typically HMLs will fund up to ~75% LTV with an annual interest rate of 8-10% and charge 2-4 points along with fees. They are much faster to get and can usually close within 7 days unlike traditional loans.

HMLs are typically good if you want to rehab a property or only need the cash for a short amount of time. You only need to make interest payments until your loan term is up which is usually 12 months. As long as you include the interest when you are calculating your deal and don't underestimate the amount of time it takes to rehab a property, then a HML can be a good option.

If you plan on buying a rental, then HMLs wouldn't be a good option since the loan term is too short. If you are planning on rehabbing the property first then renting it out, a HML could be a good option as long as you refi to a traditional loan once you rent it out.