Investor financing · NY · NJ · CT
Hard Money Loans for Real Estate Investors
A hard money loan is short-term financing secured by investment property and underwritten mainly on the property and the plan. Investors use it to buy, renovate or build when speed and flexibility matter more than a long-term rate.
What a hard money loan is
Hard money is private, asset-based lending for real estate investors. Instead of qualifying you mainly on income documentation like a bank mortgage does, the lender focuses on the property's value, the project plan and your exit: how the loan will be repaid, usually by selling the property or refinancing into long-term financing.
Because the collateral carries most of the weight, hard money can move faster and fund properties that conventional lenders will not, such as a house that needs a new kitchen, roof and mechanicals before anyone could live in it.
How the loan is structured
Most hard money loans for fix-and-flip and value-add projects share the same building blocks:
- Initial advance. A portion of the purchase price funded at closing. You bring the rest, plus closing costs.
- Renovation holdback. Rehab funds held by the lender and released in draws as each phase of work is completed.
- Interest-only payments. Monthly payments cover interest only, typically charged on the funds actually disbursed.
- Points. An origination fee expressed as a percentage of the loan amount, paid at closing.
- Short term. Terms are measured in months, sized to the renovation and sale or refinance timeline.
Across the industry, the maximum loan is usually the lower of two tests: a percentage of total cost (loan-to-cost) and a percentage of the after-repair value. Wisdom Capital's guidelines lend up to 90% of the purchase price and up to 100% of hard (renovation) costs, with the total loan capped at 70% of after-repair value. The hard money loan calculator runs the numbers for your deal.
Example using Wisdom Capital's guidelines
Illustration, not a quote| Purchase price | $400,000 |
| Renovation (hard costs) | $100,000 |
| Purchase advance: 90% of price | $360,000 |
| Renovation funds: 100% of hard costs | $100,000 |
| Total loan | $460,000 |
| Your share of the purchase price | $40,000 |
| Points: 2% of the loan | $9,200 |
| Desktop appraisal + attorney (purchase + construction) | $2,845 |
| Interest at 10.99%, if fully drawn | ≈ $4,213/mo |
Based on Wisdom Capital's program guidelines for qualified investors. Assumes an after-repair value of at least $657,143, so the 70% ARV cap does not reduce the loan. Title, recording and transfer costs are additional. Terms are subject to underwriting, eligibility and final approval.
What investors use hard money for
- Fix and flip: buy below market, renovate and sell.
- Acquisition + rehab: one loan covering the purchase and the renovation, whether you plan to sell or hold.
- Construction: ground-up building or heavy redevelopment funded in draws.
- Bridge situations: closing quickly on a purchase that a bank cannot fund in time, then refinancing.
When hard money fits, and when it does not
Hard money fits when the property needs work, the timeline is short, or the deal would be lost waiting on a conventional approval. It costs more than long-term financing, so it rarely fits a stabilized rental you plan to hold for years. For that, a long-term rental loan such as a DSCR loan is usually the better tool. See hard money vs DSCR.
What it costs
Your total financing cost is the interest paid while the loan is outstanding, the points at closing, and third-party costs such as valuation, title, legal and recording. On a short project, the number of months you hold the loan matters as much as the rate. Budget time conservatively. Wisdom Capital's pricing: 10.99% for qualified investors, 2 points, a $495 desktop appraisal, and an attorney fee of $1,950 (purchase only) or $2,350 (purchase + construction). Loans have a 3-month minimum, then run month-to-month up to 12 months.
Hard money loan FAQ
Is a hard money loan the same as a private money loan?
The terms overlap. Both describe non-bank, asset-based loans on investment property. "Private money" sometimes refers to an individual lender, while "hard money" usually refers to a lending company with defined programs. Wisdom Capital is a direct lender.
Do hard money lenders check credit?
Most do review credit, along with liquidity and experience, but the property and the plan carry more weight than in bank lending. See hard money loan requirements.
Can I use a hard money loan to buy a home I will live in?
Hard money programs like these are designed for investment property, not a primary residence. Owner-occupied purchases are handled by residential mortgage lenders under different rules.
How do I pay off a hard money loan?
Usually by selling the renovated property or refinancing into long-term financing once the work is done and the property is rented. The exit should be clear before you close.
Markets
Hard money by state
Next step
Have a Deal in Mind?
Submit the property details and let’s review the financing structure.
Helpful to include
- Property address and property type
- Purchase price and target closing date
- Renovation budget or scope of work
- Estimated after-repair value (ARV) and comps
- Your recent project experience, if any