Hard Money for your Investments-Yes or No

Hard money is money secured by the real estate that is being purchased. This type of loan is offered by private individuals or business concerns who will loan you the money needed to buy a property even when you don’t have a cent to put up yourself. The reason they are able to do this is that the property is taken as collateral for the loan. If you were to default on the loan, they would take the property as is. The term for these loans is typically short and the interest rates run from 12 to 18 percent, points are charged, and a balloon payment is usually required after 1 to 2 years. Banks do not make these kinds of loans because of the risk of default.

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