Best Hard Money Lenders for Real Estate Investment Property (2023)

For real estate investors who need to secure purchase financing quickly, hard money loans are a great funding solution to use in a pinch. In comparison to banks, hard money lenders tend to offer quick loan approval in exchange for higher interest rates and short repayment periods.

While hard money loan extensions of 2-5 years might be possible, be sure to consider mortgage lenders, loan terms, closing costs, and market volatility before signing on the dotted line.

Hard Money Loans

How does a hard money loan work? First off, hard money lending comes in the form of short-term loans from private investors or an individual private lender. They used an asset-based approval method based on the LTV (loan-to-value) of the soon-to-be purchased property being used as collateral.

Estimated property values will vary between these private lenders based on their knowledge of a particular city or state. If this is one of your first property purchases, it’s best to stick to the best cities to invest in real estate.

Credit Check

Hard money lenders will usually only do a basic check of the real estate investor’s financial status and payment history, along with an in-depth analysis of property value. Similar to a real estate investor credit line, hard money borrowers can at times require a credit score of 600-680 just to apply.

Approval Process

The estimated value of the real estate being purchased and investor experience, along with the borrower’s credit score all factor into how much you can borrow.

As someone new to real estate investing or flipping properties, you might only get approved for an LTV of around 50%, while experience flippers might be able to borrow 75% of the estimated property value.

Loan Terms

With a fast approval process, funds from a hard money loan can be released into your bank account within a few days. Unlike traditional lenders, however, the repayment periods for hard money loans can be short as 6-18 months. This means that you’ll typically need to list and sell your property quickly to obtain a favorable ROI from a hard money loan.

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Down Payment

A typical down payment on a property financed by a hard money loan can range from 10-30%. The percentage variance can be attributed to the local real estate market, along with the deal economics and your investment history. If you are a good negotiator or able to offer liquid collateral such as stocks, bonds, or t-bills this too can help you lower the down payment amount.

Don’t forget to factor in the closing costs, as well as, be weary of any lender who offers a zero down payment. Many predatory lenders will use this tactic to get you to overlook the fine print that may allow them to seize and sell your property for something as simple as a disputed missed payment.

Interest Rates

Hard money loan rates also can often be 10 points higher than traditional loans from banks. Based on property location and investor experience, the average interest rate can range from 8-18%.

Other Fees

Be sure to check the fine print of your hard money lender loan for origination fees, late payment fees, transaction fees, and wires fees.

Top Lenders

Below you find a list of the top hard money lenders who offer quick funding alternatives to using traditional financing to fund investment property purchases.

  1. Kiaivi
  2. Lima One Capital
  3. RCN Capital
  4. Finance of America
  5. Visio Lending
  6. CoreVest


Best Hard Money Lenders for Real Estate Investment Property (1)

A good choice for any company which intends to get money easily and fast with no hidden fees or any closing expenses. Kiavi is a hard money lender that provides financing for first-time flippers, from zero to five flips within 2 years.

However, the best rates, as well as, a private manager are reserved for experienced flippers who had more than 5 flips in the last 24 months.

Visit Kiavi

Lima One Capital

Best Hard Money Lenders for Real Estate Investment Property (2)

A non-traditional lender, Lima One is a great hard money loan choice for startups and experienced businesses. They request a minimum of 600 – 660 credit score points to qualify.

(Video) Revealing Interview with my Hard Money Lender!

Lima One Capital has a very wide range of offers for many types of needs, like fix-and-flip, fix-to-rent, construction loans, etc. The maximum value approved for value-add bridge loans is $20 million. However, for the fix-and-flip and construction types of loans, the limit is $3 million. The same differences between Lima One products are valid for their terms and fees.

Visit Lima One

RCN Capital

Best Hard Money Lenders for Real Estate Investment Property (3)

They are at the top when it comes to the national coverage of their financial products. Their fix-and-flip loans are available in 44 states, for residential development projects, as well as for mixed-used real estate. This is also available for multiple-unit and single-family buildings.

An attractive part of RCN Capital’s offer is that they charge interest only on the outstanding balance, not on the total value of your loan. And there is more, they have no penalties for early repayments. So this loan is ideal for those who succeed to sell quickly the property and make enough profit to cover quickly the loan. You will also benefit from great customer service.

Visit RCN Capital

Finance of America

Best Hard Money Lenders for Real Estate Investment Property (4)

This lender is outstanding when it comes to its competitive interest rates for residential and commercial real estate purchases. Season house-flippers and established investors can benefit from credit lines amounting to $10 million. This encourages large projects and large investors, that focus on big or multiple properties at the same time.

Finance of America offers good alternatives to other financing options like business loans or cash-out refinancing. Due to their focus on this specific niche, you will undergo a check about your real estate investment history, rather than your income and credit score. Which is good news for those that don’t have great credit scores yet have a consistent experience with property investments.

Finance of America

Visio Lending

Best Hard Money Lenders for Real Estate Investment Property (5)
(Video) Who are the Best Hard Money Lenders for House Flips

They are specialized in longer-term loans and also on bridge loans for rental properties. It is an interesting niche that Visio Lending successfully covers with a wide portfolio of offers. Thus, they are a good choice for individuals that intend to invest in properties for vacation and tourism, very often this involves multi-unit buildings.

They also provide attractive interest rates and do not request you a credit score or income value to qualify. Thus there are many opportunities also for those with not-so-perfect credit history.

Visio Lending


Best Hard Money Lenders for Real Estate Investment Property (6)

This lender specialized in large projects. They offer hard money mortgages with five, seven, and 10 years of repayment, and a 75% LTV. They have lines of credit going from $1 million to $50 million that allow completing construction projects, selling them, and using the same line of credit for the next flip.

They are easy to access either on their website or on through the online application, or by speaking directly with one of their counselors at the 800 phone number.

Visit CoreVest


Hard money loans are mostly used by experienced real estate investors that can sell their properties less than one year after purchase. This type of funding can use on fix-and-flips, along with commercial or investment properties that can turn a quick profit.

Fix and Flip

Fast approvals allow real estate investors who flip houses to quickly pay for repairs and renovations before selling the property at a profit.

Investment Properties

If you can get approved for a traditional loan, hard money lenders offer a simple solution to purchase rental properties with little investment experience. While their interest rates will take a bite out of your profit, you can at least start to build your property portfolio right away.

Commercial Property

If you can’t find a traditional lender to help you to invest in commercial real estate, or a local bank willing to lend you money for commercial properties, then a hard money lender might be the last option.

(Video) How to Find the BEST Hard Money Lender with Nicole Purvy


Below you’ll find answers to our most frequently asked questions about hard money loans and why they are an option to consider if you get turned down for a traditional bank loan.

aWhat is a hard money loan?

It’s a type of short-term financing for real estate investment that is secured by the property you want to renovate or fix and flip. Approval amounts from hard money lenders are typically based on a 50-75% loan-to-value (LTV) of the property being used as collateral. The repayment terms generally range from 6-24 months, while interest rates range from 8-18%.

aDo banks offer hard money loans?

No, a hard money loan is usually only offered by private lenders or alternative lenders in the real estate industry rather than banks or credit unions. Unlike financial institutions, these private investors typically only offer short-term loans that might be 10-15 percentage points higher than traditional mortgages.

(Video) 4 Questions You Have To Ask Your Hard Money Lender


What is a good return on a hard money loan? ›

The biggest advantage of becoming a hard money lender is the fact that you will be able to realize higher returns on your invested capital versus a savings account. Typical loans yield between 8% and 12%, often higher.

How do you negotiate with hard money lenders? ›

How to Negotiate With Your Hard Money Lender
  1. Know how hard money works. Hard money loans require a tangible asset to secure the loan (i.e., act as collateral). ...
  2. Know where the funds come from. Private lenders fund loans with their own capital. ...
  3. Research your lender. ...
  4. Prove your project's value. ...
  5. Have an exit strategy.
Apr 1, 2015

Is Hard Money Lending a good idea? ›

Hard money loans can be a useful tool if you need financing through a less traditional route. However, these loans come with high rates and a significant amount of risk if your investment isn't as successful as you hope. In general, hard money loans are best left to the pros.

Can you get a business loan for real estate investing? ›

Conventional business loans are available for real estate purchase as term loans from banks Businesses needing more than $250,000, as well as those with good credit and heavy capitalization, are good fits for conventional small business financing.

What are typical terms for hard money loan? ›

Hard money loans come with similar payment structure as traditional commercial loans, albeit with a much shorter term. They usually come in 12 month terms up to 3 years, with an interest-only payment structure. This means you only need to pay interest costs every month for the entire term.

How do you pay off a hard money loan? ›

Here are some hard money loan exit strategies you may want to consider.
  1. Sell the Property. One of the most common exit strategies for hard money loans is to sell the property. ...
  2. Refinance. ...
  3. Get New Loan. ...
  4. Traditional Mortgage. ...
  5. Subprime Mortgage. ...
  6. Use Business Capital.
Dec 26, 2019

Why do investors usually favor hard money loans over traditional loans? ›

Hard money loans offer a much better alternative for real estate investors due to their lenient and flexible nature. Despite the high interest rates hard money lenders charge and the lower LTV ratio, it's available to borrowers who can't access conventional lending.

What is a hard money loan example? ›

There are various types of hard money loans available such as: fix and flip loans, refinance loans, construction loans and rental property loans.

Can you refinance out of a hard money loan? ›

The short answer is yes, but there are many things to know and understand before starting the process. For the most part, refinancing a hard money loan is similar to refinancing any type of mortgage, but it may not be as straightforward because you must pay attention to your hard money loan terms and conditions.

Is hard money loan interest tax deductible? ›

In order for interest on a hard money loan to be deductible, the loan would have to be used for business purposes. Interest on personal loans (with the exception of mortgages and student loans) is not deductible. Fortunately, the government takes a broad view of business expenses.

Is hard money considered a cash offer? ›

What Is The Difference Between Cash And Hard Money? While hard money loans are not cash, they are often considered a cash equivalent because they differ from traditional loans. A bank will provide you with a mortgage based on the market value of the acquired property (i.e., the purchase price).

How does interest work on hard money loan? ›

To calculate the total interest paid on a hard money loan, you essentially just multiply the monthly repayment amount, by the number of months that you hold the property for. So if your repayment is $1500, and you hold the property for 12 months, the total interest paid would be $18,000.

Can you pay off hard money loan early? ›

For instance, if you're required to pay your loan back in six months, they may expect you to hold on to the loan for at least four months. Repaying it before this set time denies them profits from your monthly interest. To ensure you don't pay earlier, such lenders will impose a pre-penalty fee.

How do Points work on hard money loan? ›

What are points and interest rates on hard money? Hard money lenders typically charge fees to the borrower for providing the loan. These fees are called “points.” Points on a hard money loan are generally equal to one percentage point of the loan but can range anywhere from 2% to 4% of the total amount loaned.

Are hard money loans interest only? ›

Payments on hard money loans are interest-only payments. Then, at the end of the loan term, the borrower pays the principal owed in a lump sum. With traditional home loans, the money is issued by banks, financial institutions, or lenders.


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