Hard Money Basics
What Is a Hard Money Loan?
No jargon and no sales pitch. This is how we explain it at the Averlend desk, with the math that matters.
Hard Money Basics
The short version, then the substance.
Key Takeaways
- The definition that matters
- Why investors use them
- What it costs and why it is worth it
The definition that matters. A hard money loan is short-term financing secured by a real asset instead of your personal financials. The collateral, usually property or equipment, is the basis for approval. The lender cares about what the asset is worth and how the loan gets repaid, not whether your tax returns tell a pretty story.
Why investors use them. Speed and certainty. A bank takes 30 to 60 days and can still say no at the finish line. Hard money closes in days, which is the difference between winning a discounted property and watching someone else buy it.
What it costs and why it is worth it. Hard money costs more than bank debt because it moves faster and takes more risk. The math still works when the deal is right: paying a few extra points to capture a five-figure spread is not a cost, it is a toll on the road to the profit.
The South Texas angle. Averlend underwrites this every week in San Antonio and across Bexar County. If you are working a deal in Alamo Heights or anywhere else in the metro, the theory above comes with a local desk attached: see our San Antonio lending page or send the deal directly.
Questions
Quick answers from the Averlend desk.
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