Hard money & private money

How many different hard money lenders is everyone using, and what experience are you having with those lenders?

Also, are any of you using private money from individual investors? If so, what terms are they asking for?

I’m adding my own reply since no one else will…LOL

Either you all have plenty of cash…or you don’t know what hard money is…which is it?

Stacy -
Although I don’t have plenty of cash (yet), I do know what hard money is, and have a few contacts. However, I have been using conventional loans to buy my properties. Not sure if that is the best way to go, but with my good credit scores, I have been able to get up to 100% investor loans. I’m not sure how many of those I can get at one time, however. I would be interested in anyone else’s experience as well.



Thanks for the post. What bank are you using for your loans or are you going through a mortgage broker?

I am currently using Acquisition Funding Source and Statewide for hard money. Friends of mine have also used Ready Mortgage and Lance Day, but I never have.

Thanks again for the post.


If you buy and sell real estate properties, this program is a must. Imagine having $300-500,000 buying power at your fingertips. No more dealing with mortgage companies and high interest hard money lenders. Please send for details: PrivateCreLine@aol.com

Great Opportunity


I currently use LOCs to fund purchases. Generally I pay prime plus 1%, no fees to access the money.

Recently I found my first private lender. He is an older guy, who took a real beating in the stock market. He agreed to lend me up to 150k to start, secured by 1st mortgages with no appraisals, points or fees. He charges me 8% interest only, up to 35 month term.

You know I am liking that.

I have yet to use hard money. With terms like the ones I am getting, I can’t justify paying 5 to 10 points and 15 to 18% interest.


Thanks for sharing that information. I’m jealous! Wanna loan out some of that money? :lol:

I have a few private lenders that I use. I pay them anywhere from 5% to as much as 18%. I also have a hard money lender that I use. I’m just starting to work on getting the lines of credit in place so I can get some of that prime +1 action. :smiley:

Is anyone else using a combination of private money or hard money or using back lines of credit? If so please share.

Is it legal to advertise for private lenders?

I bet there is a whole bunch of people out there who would LOVE to get 8% on their money. Joe Schmoes who got burned in the stock market.

I’ve kind of been thinking about this, myself. Something along the lines of taking out a few classified ads to just test what kind of response I get.

Let me know if you’re interested and maybe we can split the ad costs.

There are some advertising do’s and don’ts, but it’s not illegal to advertise.

There are potential securities law issues that could come into play. Mainly having to do with laws related to mortgage backed securities. You don’t want to advertise in any way that people would believe you are selling mortgage backed securities.

Disclaimer: I’m not an attorney please seek competent legal advise on this subject before undertaking any advertising campaign. :lol:

Having said that, yes, I believe there are a TON of people who have been devastated by the stock market and are seeking much safer returns. Now is a GREAT time to round up some private investor capital.

If anyone is having success with private investor capital please share your strategies and success.


Hard money is available and there are many to choose from. If your credit is at least 500 you can get money, but be prepared to pay a higher interest rate. Good Luck


There is no HARD MONEY in America at the 8% range!

Commercial hard money rates are in the 12-16% range with 3-6 points.

Too many make it sound so simplistic. It is not.

Private money is, usually, even more expensive and many private money lenders are “bottom fishers”, i.e., they are last resort lenders and then they have you on “bended knee”…which means you will pay them anything because you are faced with a time certainty deadline to get funds.

Foreclosure and dip/Chapter 11 financing or pre-bk business financing are good examples.

Have Cash,

There’s plenty of 8% interest only money out there.

How do you figure private money is more expensive? You and I must be using different definitions.

Stacy…In your own posting, above, you talk about private money sources for which you pay from 5% to 18%.

I can’t get any money from anyone at 5%; and, very rarely is anyone at 18% unless you have a “drop dead” court date when money is due someone.

I define private money as that which comes from individuals that want to expose private capital to risk in a commercial real estate marketplace.

I’ve paid as much as 18% for money in the past. I’ll probably never pay that much again. Never say never…

A friend of mine just had one of his private lenders put $250,000 with him for 5% interest only. Never say never…

Good luck.

Private money is not more expensive. Typically private lenders will loan to individuals that would otherwise not qualify for a conventional loan.

That does not mean they charge throught he roof. I have seen some HML from 10-18%, but on commercial loans I have done 6% for a deal. Just depends on what you are looking for. I have contacts that you could review if you want.

So far I have used Private lenders, from 12-14% interest, 1 year terms and no payments due until I finsh rehab and resell the property. Makes holding costs much better, and no points can’t be beat. There is a HML here in Houston charging 8% now, or was last month when I checked… and I am preapproved through them in case I need it, by why pay interest payments every month and points if you can use private funding ??

Heather Zaal

It’s been a while, but the last private lender I used was no points and 10% interest only for 6 months. She asked what rate she would get and I responded with “What seems fair?”. I could have gone lower I’m sure if I had wanted, but since that was our first deal together, I agreed.

Private money terms are just whatever two folks agree on - ain’t much different than buying a house.


Is there a difference in costs for private money in the amount of $80,000.00 and $8,000,000.00?

I can’t seem to find that no points stuff.

I’m quite certain there is, ;).

Most folks here ain’t dealing with that many digits. However, it’s pretty much a given that blanket statements will be attacked. I certainly don’t have commercial experience with HML’s as I’ve dealt mostly with singles and small multi’s. In that arena I think it’s common for private lenders to be much less than hard money. Take care.

I am a HML from DFW. What some of you are missing in comparing private and traditonal funding to Hard Money is the following.

Hard money rates are based on ARV not current LTV That means you can borrow more from a HML then from a conventional lender

@ 14% Interest only you have the roughtly same payment as a 90% LTV Investor loan with MI on a P&I loan @ 7.5%.

With Hard Money you can close within 1-3 weeks. Conventional can take MUCh longer

Hard money helps you avoid bad deals. If a HML doesn’t want to do a deal neither should you.

In many cases an HML can be obtained faster and easier then a conventional loan and while in almost all cases the amount you can borrow from a HML exceeds the amount you can qualify for from a convention lender the cost difference is minimal. HMLs are not for everyone and every HML has a different program and qualification process. However if you need fast access to capital for REI then a HML may be your new best friend.