Why residential hard money loans get an unfair bad rap

Let's face it — thanks to some shady, predatory lenders in the past, hard money sometimes gets a bad rap. In this article, we'll tell you what residential hard money loans are actually about and remove some of the stigmas surrounding them.

Unfortunately, in the past, some hard money lenders used schemes like "loan to own" where they provided incredibly risky loans to borrowers with the sole intention of foreclosing on the collateral property. Thankfully, in today's market, these types of predatory tactics don't exist anymore. In fact, hard money loans are a completely legitimate way for real estate investors to get funding, especially if they've experienced a recent short sale or foreclosure.

So, what exactly is a hard money loan? To put it simply, a residential hard money loan is a loan that's used for a single family home (or a duplex) and that's both short-term and secured by real estate. With a loan of this type, the money typically comes from private investors instead of credit unions and banks. The length is generally about one year, but some can be extended for as much as five years. The borrower puts up assets like a property as collateral; this can be a property they already own or the property they intend to fix and flip.

Residential hard money loans versus bank loans

Because the lender has this collateral to fall back on, they are less concerned with the borrower's credit, financial history, or current funds. This is a good thing in several ways. One, it means much less red tape, so many borrowers can get approved in a day or two and get funded in as little as a week, compared to the 30-45 days they may wait for a bank loan. Two, it means that a mistake in the past doesn't have to doom the borrower's real estate career for good. And, finally, it means the borrower doesn't have to have a full-time job on the side to show the bank a steady income. Instead, they can focus on their real estate dreams.

Finding a reputable hard money lender in Arizona

If a residential hard money loan seems like the right move for you, you want to find a reputable lender to work with. It's easy! Send us an email or give us a call and we can sit down with you, hear your real estate dreams and help them come true.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC 
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701  

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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