Hard money loans for investors and builders
Quick answer
A hard money loan is short-term, asset-based financing secured by real estate. The lender underwrites the deal and the property's value more than your income, so it funds fast — often in 5 to 10 days.
Rates run around 9–12% plus 1–3 points. That's the cost of speed and flexibility, and it's worth it on a short hold where closing fast wins the deal.
Hard money has a bad reputation it mostly doesn't deserve. It's not a last resort — it's a speed tool.
Investors use it not because they can't get a mortgage, but because a mortgage takes 45 days and the deal closes in ten. The higher rate buys time you can't get any other way.
Key takeaways
- → Hard money is asset-based — the property carries the loan, not your income.
- → It closes fast (5–10 days), which is the whole reason investors use it.
- → Costs run ~9–12% plus 1–3 points — fine for a short hold.
- → Always have an exit: sell or refinance to pay it off.
How hard money works
The loan is secured by the real estate, and the lender sizes it against the property's value — often the after-repair value on a flip. Your credit and income matter less than the deal.
That focus on the asset is what lets hard money close in days. The lender is protected by the property, not by a deep dive into your finances.
What it costs and why
Rates around 9 to 12% plus 1 to 3 points sound steep next to a mortgage. On a five-month hold, though, the total cost is small compared to the profit you'd lose by missing the deal.
Budget the carrying costs honestly — interest, insurance, and taxes run the whole time you hold the property.
When hard money makes sense
Use it to win and renovate, then exit. Flips sell; rentals refinance into cheaper long-term financing once stabilized — see our rental and BRRRR guide.
The mistake is holding hard money too long. It's short-term by design, so the exit is part of the plan from day one — the full fix and flip guide covers ARV and draws.
Best hard money lenders
Best hard money and fix & flip lenders
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For investor and bridge financing matched across lenders, eBoost Partners offers bridge construction financing.
Related guides
Fix & flip loans overview
How investor financing works end to end.
Financing your first flip
Get funded as a beginner.
Bridge loans
Cover the gap between deals.
Rental & BRRRR loans
Refinance into long-term holds.
Commercial construction loans
For ground-up builds.
Loan calculator
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