What happens when you want to buy that "under valued" property and need a lender to provide an indeterminate price structure giving you access to fast cash?  Or what if you needed large amounts of cash because you are faced with foreclosure on your property? Don't look at conventional money lenders who won't touch you with a barge pole. That's conventional wisdom for you. Well then, what next? You can talk to a ‘hard money lender' who will grant you a ‘hard money loan'.

Hard money loan is different from a conventional mortgage in that it is capable of being processed faster, say within 72 hours of reception of documents. They are also available at higher interest rates. Typically, a hard money loan is ‘asset-based loan financing' through which you, the borrower, receives money based on the value of collateral property. Funds may be secured on collaterized loans for any kind of property, even commercial ones. As you might have guessed, hard money loans or mortgages fall within the purview of private investors and local companies as most conventional lenders, particularly the banks, won't dream of such a course. Also, you might have already guessed, hard money lenders charge quite a pie and are somewhat harder to locate than conventional lenders. On the other hand, however, they manage to fill the gap left over by mainstream lenders adequately. That is, if you have too many credit problems that's who you can turn to.

 Hard Money Lenders are not for everyone and it has its place and trade-offs.  They have different programs and qualification processes; however, if you need fast access to capital for Real Estate Investment then a Hard Money Lender may be your solution. 

As stated earlier, interest rates are higher and can vary between 14 percent and 18 percent annually and may be paid on a monthly basis. Depending on which lender you go through and your requirements, most loans are extended over a six or twelve-month period.

And what is the kind of documents required by the typical private lender? Well, quite a few would ask for discount or origination points. Everybody, however, would want the "As Is" Appraisal & Flood Certificate, Inspection, the title, and Vacant Dwelling Insurance. The amount of loan you can acquire differs from one lender to another. Mostly, though, they vary between $ 25,000 and $ 1,000,000. In most cases, you will need to put a down payment that covers the cost of repairs etc and you will also need to pay a monthly interest rate although some lenders will postpone the monthly interest payment till the end of the loan. And yes, there will be an inspection of the property before a loan accrues to the borrower.

Is it possible to acquire funds for repairs? Yes, of course. You need to fill out a ‘Draw Request' form in which you list all the completed repairs along with vendor invoices.  Hard money lending is popular because it is relatively hassle-free, easy to acquire, (mostly) doesn't take credit rating into account, among other things.