looking for hard money lender - Posted by BEN

Posted by dave d on September 20, 2001 at 24:51:24:

I am looking for Hard Money in Ohio, preferably Cleveland

Thanks a ton!

looking for hard money lender - Posted by BEN

Posted by BEN on April 09, 2001 at 15:31:20:

Were can I find a Hard Money lender that will lend me %100 of purchase price and rehab costs?

There really isn’t one - Posted by Chenel Moore_Fl

Posted by Chenel Moore_Fl on April 11, 2001 at 12:00:11:

HML usually lend no more than 70% of the value of the house. If you are in NY, I have a referral to a guy who lends up to 55%. I just used him. He is excellent, rich as hell, and smart as hell. You need to email me about the specifics of your deal and then I will let you know if he can do anything.

Re: looking for hard money lender - Posted by Sonnie In O.C. NY.

Posted by Sonnie In O.C. NY. on April 11, 2001 at 03:26:15:

Good Day!

I am also looking for a hard money, who can help me with financing for the purchase price and rehab costs.
I am asking for 60 to 65% LTV.

I am located in Orange County, NY. You can email me at sonniej1@aol.com

All Responds Appreciated.

Thanks in Advance!!!

Sonnie - Orange Cty. NY

What is a hard money lender? - Posted by Angel - Vestal, NY

Posted by Angel - Vestal, NY on April 09, 2001 at 22:37:48:


I just wanted to know what exactly is a hard money lender? Is it like a Loan Shark? IM 20 year old college student, with a good rental property deal, however I don’t work and I haven’t established credit. I would really appreciate this information.


Where are you located? - Posted by Jim Kennedy - Houston, TX

Posted by Jim Kennedy - Houston, TX on April 09, 2001 at 16:32:53:

Where are you located? Since hard money lenders are generally local or regional in nature, it would be helpful if we knew what city and state you’re in.

Best of Success!!

Jim Kennedy,
Houston, TX

Re: There really isn’t one - Posted by Jim Kennedy - Houston, TX

Posted by Jim Kennedy - Houston, TX on April 11, 2001 at 19:03:05:

I’m a little confused by the title of your post. Are you saying that there isn’t a hard money lender who will loan 100% of the purchase price and rehab costs as Ben asked? If that is what you’re saying, I must emphatically disagree. As you mentioned, hard money lenders usually lend no more that 70% LTV – but MANY hard money lenders base the LTV on the “after repaired” value as opposed to the “as is” value. Those same hard money lenders will frequently fund the repairs as part of the loan. When the repair costs are included in the loan, the lender generally escrows the funds and releases them in draws as each stage of the rehab is completed.

BTW, Ben mentioned in a prior post in this thread that he is in Tacoma, Washington.

Best of Success!!

Jim Kennedy,
Houston, TX

Re: What is a hard money lender? - Posted by Mike Schmidt

Posted by Mike Schmidt on April 09, 2001 at 23:12:14:

Has all the terms commonly used in here. This link is found under the “How to” articles section located in the left menu bar on this site.

Hard Money Loan.A loan that is underwritten with the condition and value of the property as the primary criteria for approval. Secondary issues may include the credit of the borrower, the ability of the borrower to repay the loan and/or the ability of the borrower to manage the property or successfully complete a rehab and sell the property. Owner occupancy, debt ratios and other issues are seldom a factor. Appraisals rather than purchase prices are used to determine value. Cash out purchases are often allowed and are another key benefit. These loans are usually approved within days and are often funded in two weeks or under with times as short as two or three days not uncommon. The cost for the benefits of speed of funding, lax underwriting and other advantages is typically a moderately high interest rate (usually low to mid teens) and high points (usually 5 to 10).

Re: Where are you located? - Posted by Ben

Posted by Ben on April 09, 2001 at 17:30:34:

I’m located in Tacoma, Washington.



Re: There really isn’t one - Posted by Chenel Moore

Posted by Chenel Moore on April 11, 2001 at 20:48:26:

If that is the case, I need the name and number of your hard money lender. I have done a couple of deals using hard money doing exactly as you have stated, basing the value on the after repaired value, which tends to be more risky to the hml. There was not a hard money lender who would give us 100% of the purchase price and fix up costs even based on the after repair value. I either had to have a property where the owner was assisting the financing and stucture the deal from that standpoint, or the last one I used based it on the actual value of the house without ever seeing the inside (drive by appraisal).

So at any rate, send me the name and number, I always need those types of guys in my arsenal.

And no, I didn’t see that Ben was from Tacoma Washington.

But Thanks for the info.


A Long Response - Posted by Jim Kennedy - Houston, TX

Posted by Jim Kennedy - Houston, TX on April 12, 2001 at 15:49:18:


Even though you e-mailed me privately, I’m taking the liberty of responding here on the news group in hopes that others may benefit. Since I won’t be discussing any confidential information, I didn’t think you’d mind.

Here’s a reprint of a post that I did a while back:

It may merely be semantics, but I think of “private money” and “hard money” as two closely related but different sources of funding. I consider the main distinction between hard money and private money is that hard money comes from sources routinely accustomed to funding transactions while private money comes from sources that don’t ordinarily fund deals and may never have funded a deal before. These are generally private individuals who you cultivate as a source of funds, e.g. your doctor, dentist, accountant, neighbor, relative, former co-worker, or basically anyone you know who may have some money to invest.

In the case of hard money, the lender generally dictates the terms of the loan. On the other hand, with private money, the terms of the loan are very negotiable between the private money investor and the real estate investor.

Depending on the lender, hard money will want an LTV of 65% or lower, interest in the teens (12% - 18%), with 3-10 points and possibly a pre-payment penalty. Some hard money lenders will base the LTV on the ?after repaired? value as opposed to the ?as is? value. This allows the investor to pay for the repairs as well as the acquisition of the property. In those cases, the repair funds are generally held in escrow and released on draws after each stage of the rehab is completed.

A hard money lender is also known as an equity-based lender. In most cases, these folks are either full time hard money lenders or regularly make hard money loans as a supplemental source of business.

Ed Wachsman has a pretty good explanation of hard money in his How To article titled ?A Glossary Of Common Terms Used In Loans And Lending?. You can find it at:


Regarding private money, when I approach a private individual to see if there’s any interest in funding a deal with me, I try to find out what will make the investor happy. I’ll ask the investor what kind of a return he/she is currently getting on their money. I then ask what kind of return they’d be looking for on our deals. I’ve had people quote me rates as low as 7% and as high as 25%. I then structure the deal so that my investor receives more than he asked for. If he says he’d be happy with 10%, I give him 11% or 12%. If he says he’d be happy with 15%, I give him 16% or 17%. Rarely do any of my private money investors ask for points, but sometimes I’ll offer one or two points just to sweeten the return for my investor. As long as the deal will support the cost of the funds, I’m not too worried about the interest rate. The availability of the money is generally more important to me than the cost. Naturally, if the investor asks for more than the deal can afford to pay, we either negotiate more reasonable terms or I take a pass on that particular investor for that particular deal.

By the way, hard money lenders generally get the funds that they loan out as “hard money” from private investors.

End of post.

Here’s another post that I just did a few days ago after attending the convention in Atlanta:

One of the tips that I learned at the convention was from Merle and Pat Woolley. They pay their private investors a set interest rate. I’ve been negotiating the rate I pay based upon each individual investor. Since some of my private investors come as referrals from existing investors, they generally come to me with a pretty good idea of what interest rate I’m paying to the person that referred them. It’s crossed my mind more that once that if my investors were to compare notes, that the lady I’m paying 8% might be upset if she found out I’m paying someone else 18%. Never mind that she only has $20K available while he has VERY deep pockets (up to $250K so far ---- and I don’t think I’ve hit his limit yet). Anyway, I’m seriously considering the Woolley approach of dictating the interest rate versus negotiating the rate.

End of post.

Chenel, I’m happy to share the contact information of any hard money lenders that might be able to help. However, I think of my private lender contacts as confidential and proprietary. I could be wrong, but I would suspect that other experienced investors feel the same way. The exception would be if the private lender had such a large amount of capital that I could never possibly be able to put all the money to work. If I were ever to develop that kind of a relationship, I would probably become a hard money lender, and put together a program that was mutually beneficial.

Hope this help.

Best of Success!!

Jim Kennedy,
Houston, TX

Hard Money Lenders - Posted by Jim Kennedy - Houston, TX

Posted by Jim Kennedy - Houston, TX on April 12, 2001 at 12:53:56:


Here are a few Texas based hard money lenders that make loans in Florida:

Statewide Capital Investments
George Pugh
711 W. Bay Area Boulevard
Suite 500
Webster, TX 77898
281-332-2009 or 1-800-460-1890.

MGM Real Estate Investments, Inc.
Matt Garcia or Scott Morris
4740 Ingersoll, #211
Houston, TX 77027

Ready Mortgage Corp.
Craig Pettit
P.O.Box 852006
Richardson, TX 75085

I don’t use hard money lenders to funds my deals. I prefer to use private investors - easier and cheaper. But I do try to keep my finger on the pulse of the hard money market, just in case I’d ever need to avail myself of a hard money loan.

Both Statewide and MGM make loans up to 65% LTV of the ARV (after repaired value) and both will allow the rehabber to roll the cost of repairs into the loan as long as the contract price and the repair costs combined fall under that 65% LTV threshold. There is another hard money lender here in Houston that offers the same terms but they only loan in the greater Houston area. There are probably some other nationwide hard money lenders that make loans in Florida. You might want to check out the thread that started at:


Hope these help.

Best of Success!!

Jim Kennedy,
Houston, TX

Enough said - Posted by Chenel Moore

Posted by Chenel Moore on April 12, 2001 at 19:06:26:


I emailed you privately because we seem to have just a slight difference of opinion on the selection of the words and terms used to describe what is essentially the same thing.

Bottom line, instead of going back and forth on the board, I thought it in the best interests of everyone who posts here that we email each other privately to sort to speak reach our own conclusion. Furthermore, I appreciate your information and the “technical” but loosely applied definition of the terms dealing with mortgage lending. What you described as a hard money lender, I would describe as a mortgage broker. In my case, I would place a Household Finance or someone like an Ed Garcia in this category. When I think of terms of hard money lender or equity based lender I
think of terms of someone who is using their own line of credit or cash. You are right private lenders tend to lend their own money or lines of credit and thus have a limited pool of investors who are even aware that they exist.

Perhaps in the southwest terminology can somewhat differ. Whenever I take real estate exams (both in the state of Maryland and Florida) the national standards dictate that if the lender has to find the source of funds from an outside source then he is functioning in the brokerage capacity.

I don’t know, I have noticed that food, style of homes and accents differ so why not terminology?
At any rate, it appears that we have both remain in the same position where we started so let’s just leave it at that. Thanks for the information regarding referrals. I was looking for private investors as you call it that lend in Florida. The private investors (as you call it) that I have dealt with who are regional or local in the lending, tend not to mind referrals as that is how they make the best or the most money from the system of referrals. But hey, maybe you guys do things differently in Texas!!

So I sense that we could end up debating back and forth over the issues and with both us being so very longwinded and obviously successful at finding our own lenders, let’s avoid going there and leave this very long subject that has been revisited on this board quite often to an end.

Happy Investing!!

Chenel Moore_Fl.

Re: Hard Money Lenders - Posted by MICHAEL AMATO

Posted by MICHAEL AMATO on April 12, 2001 at 20:03:01:


Re: Enough said - Posted by Jim Kennedy - Houston, TX

Posted by Jim Kennedy - Houston, TX on April 12, 2001 at 23:47:09:


Actually I think a discourse between professionals who may happen to have a difference of opinion is a good thing. As long as the discussion is conducted with respect and in a cordial manner, everyone has the opportunity to grow and learn, including those observing the exchange from the sidelines.

I think we are closer to agreeing than you may think. First of all, what I refer to as a “hard money lender” is not necessarily determined by the source of the funds but rather by the terms of the loan. I consider “hard money lender” synonymous with “asset based lender”. By that I mean that the lender looks primarily to the collateral as the primary consideration for determining whether or not to make the loan. In most instances the credit of the borrower is either of little or no consequence to the lender. Other major factors are the LTV, interest rate and points. In many instances the lender is definitely engaged in loan brokerage, and in many states requires a loan broker’s license to do so. If the lender is not “brokering” funds but rather lending his own funds or funds from a line of credit, I would still consider him a hard money lender or asset based lender if the terms match those described previously.

While there may be minor differences in some areas of the culture between Texas and other parts of the country, (we do catch a lot of grief over cowboy hats, boots and BBQ), I doubt that terminology used in real estate is one of those areas. I’d be intrigued to learn what others who visit here think. I might even be swayed to change my opinion.

Best of Success!!

Jim Kennedy,
Houston, TX

Re: Hard Money Lenders - Posted by Brad G

Posted by Brad G on May 01, 2002 at 13:39:26:

I am interested in hard money but if I buy a house at 120k and can sell it for 150k how do I make up the deficit based on the HM criteria of a 65% of appraised value?

Re: Hard Money Lenders - Posted by Jim Kennedy - Houston, TX

Posted by Jim Kennedy - Houston, TX on April 12, 2001 at 23:43:46:


I’m not the one looking for funding in Florida. Hopefully Chenel has read your post since she’s the one in Florida. Or you might want to post to her directly. I was also hoping that anyone with hard money sources in Tacoma, Washington would weigh for the benefit of Ben, who originally started this thread.

Best of Success!!

Jim Kennedy,
Houston, TX