Below is a video that hard money expert Beau Eckstein did that explains what a hard money loan is.
Hard money, also called private money, is money that is borrowed from non-traditional lenders, like banks.
It's often in the form of short-term financing that is based on any equity that has accrued in a real estate property. Hard money is no longer just for people with poor credit – rather, it's used for real estate investors who may need to close a deal quickly.
Conventional lenders, like banks, may take weeks if not months to fund a loan. Hard money lenders can fund a real estate loan in a few days, sometimes even just a few hours.
Of course, interest rates are higher, but the loan is of such a short-term nature that you may only pay 1 or 2 months of interest payments.
Real estate investor and hard money lender Beau Eckstein calls hard money loans “opportunity loans” – they exist because conventional mortgage lenders cannot or will not move fast enough for savvy real estate investors.
Watch the video. If you want more information about hard money loans, visit Beau's website below: