What is Private Money and Why is it Called Hard Money?

Have you ever come across the term “Hard Money loan”? It might sound a bit intimidating at first glance. However, Private Money Loans, also known as Hard Money loans, are specifically tailored for financing real estate transactions in unique situations.

So, why the term “Hard Money”? It’s not because these loans are difficult to obtain or repay, but rather because they involve cold, hard cash transactions.
When might one opt for Private Money or Hard Money financing? Typically, when dealing with properties or borrowers who don’t fit the mold of conventional lending criteria.

For instance, consider the case of a young woman I recently assisted. Referred to me by a real estate agent, she had inherited a property in disrepair and was entangled in a tumultuous divorce and custody battle. Juggling these challenges, she lacked the time and resources to address the property’s issues.

To alleviate her burden, I facilitated a Private Money loan, providing her with the necessary funds to renovate the property and list it at its highest potential value. The outcome? She successfully sold the property, using the proceeds to purchase a condo for herself and her daughter.
Here’s a Hard Money story with a happy ending.

I am Garrick Werdmuller, President, and CEO of Fresh Home Loan Inc.
I can lend Private Money all over California,
Whether you have a fix and flip project, deferred maintenance, or just some quick cash to buy another investment property, give me a call or visit Fresh Home Loan .com and you can get more information or schedule a meeting with me.

Now a questions I get asked a lot is “What are the uses for Private Money or Hard Money loans? “

Fix and Flip: Investors use private money to purchase distressed properties, renovate or improve them, and then sell them quickly for a profit. Private money loans cover acquisition costs, renovation expenses, and holding costs during the renovation process.

Rehabilitation: Properties in need of significant repairs or upgrades can benefit from private money loans to fund the rehabilitation process. Whether it’s addressing structural issues, updating outdated features, or modernizing the property, private money provides the necessary capital for improvements.

Additions: Private money can finance property additions or expansions, allowing investors to increase the value and appeal of their real estate assets. Whether it involves adding extra square footage, creating additional living spaces, or upgrading amenities, private money loans can fund these projects.

Construction: Private money lending supports new construction projects by financing land acquisition, construction costs, and development expenses. Investors undertaking ground-up construction rely on private money to fund the various stages of building, from site preparation to completion.

Bridge Financing: Private money loans serve as short-term bridge financing for real estate transactions where traditional financing is not immediately available. Investors can use private money to secure a property quickly or to bridge the gap between purchasing and securing long-term financing.

Cash-Out Refinancing: Real estate investors can leverage the equity in their properties through private money cash-out refinancing. This allows them to access cash for additional investments, debt consolidation, or other financial needs while retaining ownership of the property.
Distressed Property Acquisition: Private money loans enable investors to purchase distressed properties at foreclosure auctions, short sales, or bank-owned sales. These properties can be renovated or improved for resale or converted into income-producing assets.

Specialized Investments: Private money can fund specialized real estate investments such as commercial properties, multi-family residences, vacation rentals, or niche markets. Investors with unique investment strategies or property types can tailor private money loans to meet their specific needs and objectives.

Overall, private money lending offers flexibility, speed, and accessibility, making it a versatile financing option for various real estate investment opportunities and strategies.

For more information to to contact Garrick:
Call or text: 510.282.5456
Email: Garick@freshhomeloan.com

Garrick Werdmuller

President CEO
Fresh Home Loan Inc
510.282.5456 call/text
NMLS 242952

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All loan approvals are conditional and not guaranteed and subject to lender review of all information. Loan is conditionally approved when lender has issued approval in writing, but until all conditions are met, loan cannot be funded. Specified rates and [products may not be available to all borrowers. Rates subject to change according to market conditions and agreed upon lock times set by borrower. Fresh Home Loan Inc. is an Equal Opportunity Mortgage Broker in California. This licensee is performing acts for which a real estate license is required. Fresh Home Loan, Inc. is licensed by the California Department of Real Estate #02137513 NMLS # 2124104

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Garrick Werdmuller

(510) 282-5456