Hard money loans are short-term, asset-based real estate loans used primarily for fix-and-flip, distressed acquisition, and bridge scenarios. Unlike DSCR loans (which are 30-year and based on rental cash flow), hard money is 6-18 months, based on the property's after-repair value (ARV), and typically priced at 9-13% with 1-4 points.
Standard hard money structure: 80-90% of purchase price + 100% of approved rehab costs, capped at 65-75% of ARV. Draw schedule releases rehab funds in stages after inspection. Interest-only payments during the term; balloon at maturity. No prepayment penalty on most programs, so you can flip and repay in 3-6 months with minimal interest.
Hard money is the acquisition engine of the BRRRR strategy: Buy with hard money, Rehab to force appreciation, Rent to stabilize, Refinance into a DSCR loan to pull capital back out, Repeat. Done correctly, an investor can recycle a $75k capital stack across a dozen properties in a few years.
DSCRloans.net brokers hard money from national fund lenders as well as regional balance-sheet lenders. Get a fix-and-flip quote or explore our related fix-and-flip guide.