What is private party real estate equity lending “hard money”?
Real estate equity loans, commonly called “hard money”, are collateralized by equity in real estate. Under typical circumstances collateral must have an LTV (loan to value) not greater than 70%. Real estate equity lending can be used in a number of ways such as bridge financing for real estate investments, business real estate asset purchases, foreclosures and refinancing. In exchange for quick funding and no credit checks, the cost is generally more than conventional financing, such as a bank loan. “Hard money” rates can range from 11% to over 25%, to include points ranging from 4 to greater than 10. The greater the risk in the project, the higher the price.
