What is a hard money lender?

Private money lenders (also called “hard money lenders”) offer loans to consumers but do not sell them to third parties. These loans are often funded by a variety of sources like private lenders.

Use case:

• Investment properties only. 
• You can only access these types of lenders if you are looking to rent out your property as either a short-term rental (STR) or long-term rental (LTR).

Benefits: 

• Fast pre-approval (matter of days)
• Can lend directly to LLCs
• Can lend for renovations

Things to consider: 

• Private lenders can have less oversight.
• Usually short-term (under 10 years, aka 5/1, 7/1, 10/1).
• Interest only loans.
• Prepayment penalty.

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