Hard Money Loans for Real Estate Investors

A hard money loan is short-term financing secured primarily by the property rather than your credit or income. Funded by private lenders rather than banks, it trades a higher rate for something investors value more on an active deal: speed and certainty.

Learn the mechanics in our hard money loan glossary entry, or read on for how Real Lending structures them.

When hard money is the right tool

• Speed-sensitive acquisitions. Win the auction, the off-market deal, or the multiple-offer situation by closing in days with cash-like certainty.
• Rehab projects. Banks won't lend on a property that needs work; hard money will. (For dedicated purchase + rehab terms, see fix-and-flip loans.)
• Bridges. Acquire or stabilize now, refinance into a DSCR loan later. See bridge loan.
• Properties banks reject. Condition, timeline, or structure that conventional underwriting can't accommodate.

How hard money is underwritten

Unlike a bank loan, hard money is asset-first. The two questions that drive approval are:

1. What is the property worth? Lenders advance up to ~80% of as-is value, or on a rehab a blend of loan-to-cost plus an ARV cap.
2. What is the exit? Because the loan is short-term with a balloon, the lender needs a credible payoff — a sale or a refinance — within the term.

Your credit score matters far less than with a bank. Many programs have a soft minimum (often ~600–660) mostly to screen for title and fraud risk; some will fund strong-equity deals with no minimum at all.

What hard money costs

Hard money is priced in two parts:

• Interest — a higher annual rate than a bank, charged monthly (usually interest-only).
• Points — an upfront fee, typically 1–3% of the loan, paid at closing.

Because the loan is outstanding only a few months, the dollar cost is modest relative to the profit on a well-bought deal. The right way to evaluate it is total cost over your expected hold — points + interest + fees — not the headline rate alone.

Example

A $200,000 hard money loan at 11% with 2 points, held 6 months:

Points:    $200,000 × 2%        = $4,000
Interest:  $200,000 × 11% × 0.5 = $11,000
Total financing cost (6 mo)     ≈ $15,000

On a flip projecting a $50,000 profit, that's a cost of doing business that the speed of hard money makes possible.

Texas and nationwide

Real Lending arranges hard money nationwide, with especially deep coverage across Texas metros — Houston, Dallas, Fort Worth, San Antonio, and Austin. All loans are business-purpose on non-owner-occupied property.