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Investing In Hard Money Loans – Hard Money Lenders Explained – How To Properly Find & Utilize Them

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Investing In Hard Money Loans – How to Choose

Many people have misconceptions about hard money lenders. We’re going over what exactly they are and why they’re important.

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When I became a Realtor in 2010, I had never heard of hard money lending in my life. I thought if you wanted to buy a home you had to get a 30 year loan with a big bank or pay cash. I never realized there were so many other ways such as hard money and seller financing. Because of that, I never attempted to flip houses because I couldn’t qualify for 30 year loans and I didn’t have cash.

Once I learned about hard money lending, that all changed. I immediately started finding deals and getting hard money loans to do my first flips. Fast forward to today and we still utilize hard money lenders.

The first thing to know about them is that they’re much different than traditional banks. They care more about the deal than they do the borrower. A traditional bank cares more about the borrower than they do the deal. In a hard money lender’s point of view, if you default on a good deal, they’re going to get a really nice property.

The benefits of hard money lending include quick financing in typically 7-10 days. This makes it able to compete and be almost the same as cash. They will also fund as many good deals as you can bring to the table as long as you can cover the down payment and interest payments.

The downside is they’re extremely expensive. Typical interest rates range from 9-12% with points. Points are an upfront fee that is immediately paid to the lender. One point would equal 1% of the loan amount. Also, hard money loans are typically only 6-12 months long. Though the costs are higher, as long as you account for them in your offer then you will be fine.

If you’re looking for a hard money lender the best place is Google. You can search for national and local lenders. National ones will be cheaper but more strict. Local ones will be more expensive but have more flexibility. It really depends on what you’re looking for.

Hard money is a great tool for house flippers. Most people doing volume use them to help scale their house flipping business.

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50 Comments

  1. Debra Huynh
    July 29, 2021 at 7:32 pm

    Can you recommend where to find these hard money lenders?

  2. Cristian Trujillo
    July 29, 2021 at 7:32 pm

    THANK YOU FOR THE AWESOME VIDEO, HAVE LEARNED A LOT WATCHING YOUR VIDEOS IN PAST DAY LOL. KEEP UP WITH THE GREAT CONTENT 👊🏾

  3. Mmm Biscuits
    July 29, 2021 at 7:32 pm

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  4. Ishmael McCarthy
    July 29, 2021 at 7:32 pm

    If you change a billion lives, that's the formula to becoming a billionaire. Loaning, adding, giving, sharing, providing value creates wealth – of mind, heart, soul and yes, finances but it starts with the value you give. Love it

  5. Northern Motors
    July 29, 2021 at 7:32 pm

    Would you be able to use this options to buy land and build a home? Or would the time frame of 6-12 months per loan term probably not make it possible?

  6. Jack Of All Trade's LLC
    July 29, 2021 at 7:32 pm

    Ok using ur same numbers say the are giving me 70% and i talk the owners down on price to below the 70% witch the closing cost would also fit under that 70% will i still have to have a downpayment ?

  7. David Payne
    July 29, 2021 at 7:32 pm

    Is someone gonna score a touchdown 😂😂😂

  8. Virol john
    July 29, 2021 at 7:32 pm

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  9. Oscar Mendez
    July 29, 2021 at 7:32 pm

    Would you recommend a Hard money loan for rental properties ?

  10. Matthew Hetrick
    July 29, 2021 at 7:32 pm

    Thanks for the guidance Ryan. You laid it out very clearly and helped me gauge what I should expect for points and interest.

  11. TheBalt13
    July 29, 2021 at 7:32 pm

    After struggling to flip the first three homes 😩😩😩 If would have known this I would have been just fine 😂

  12. Angel Figueroa
    July 29, 2021 at 7:32 pm

    You gays speak Spanish.

  13. Robert Termath
    July 29, 2021 at 7:32 pm

    Hi Ryan! I enjoyed watching this informative video on hard money.. quick question though….Will hard money lenders require an investor put up additional collateral such as your personal residence?

  14. Sean Pan
    July 29, 2021 at 7:32 pm

    Awesome breakdown Ryan. Hard money loans are pricey, but they enable investors to do the deal in the first place! And like you mentioned, the more deals you do, the better your rates will be. I've been shocked at how low our rates have been for our top tier clients 🤣. Too bad we don't lend in Vegas, otherwise, I'd hook you up 👍

  15. Mr Adams Road To A Billion
    July 29, 2021 at 7:32 pm

    Hi Ryan i found a couple of properties that are in the pre foreclosure status and I was wondering would a hard money lender be a good option for this kind of real estate investing?

  16. Rafa Díaz
    July 29, 2021 at 7:32 pm

    Excellent video bro, very helpfull 👍

  17. Armando Vigil
    July 29, 2021 at 7:32 pm

    Thanks for the info Ryan!! Just got a new subscriber! 🤝

  18. Debra Swearingen
    July 29, 2021 at 7:32 pm

    Can you get the hard money loans without personal collateral?

  19. lg2designs
    July 29, 2021 at 7:32 pm

    Great info, and video! Thanks Ryan, much blessings!

  20. lg2designs
    July 29, 2021 at 7:32 pm

    Great info, and video! Thanks Ryan, much blessings!

  21. Joseph Hernandez
    July 29, 2021 at 7:32 pm

    Thanks!

  22. Brenda Perez
    July 29, 2021 at 7:32 pm

    Who would we approach first? A realtor to help us find the distressed property or a hard money lender and then the realtor?

  23. IMAN WHOLESALE
    July 29, 2021 at 7:32 pm

    11 minutes still didn’t explain : are these individuals , companies , where did they get their money from , what governmental organization regulate them …. you keep saying they they … how hard lenders get licenses to lend money to public what is their history ? When did they came to the RE scene ? Stages they went through till they became the way they are today ????

  24. Starla Sandoval
    July 29, 2021 at 7:32 pm

    Do you have to pay the down payment and monthly up front or after?

  25. A F P1
    July 29, 2021 at 7:32 pm

    👍🏼👍🏼👍🏼

  26. Me Blah
    July 29, 2021 at 7:32 pm

    Awesome with I would have seen this before! 👍🏽👍🏽✨

  27. Rico Bee
    July 29, 2021 at 7:32 pm

    Hey Ryan! thanks for the info and the simplicity of explaining things!! you covered a lot of grey areas that no one has actually mention on Hard money! great video i learned a lot! keep up the good work!! SUBSCRIBED!!!!

  28. Betsy Gerrin
    July 29, 2021 at 7:32 pm

    Do you have to pay capital gains on properties like this?

  29. J Zaragoza
    July 29, 2021 at 7:32 pm

    So you are saying that on the 50 k property, I will get a loan for 56k and will need 14k out of pocket to complete the project? Did I miss something? Thank you sir.

  30. Jimmy Coleman
    July 29, 2021 at 7:32 pm

    Great content man, your gonna be at a million subs in the future for a fact

  31. Juan Monsalve
    July 29, 2021 at 7:32 pm

    How would you find a mentor to pay?

  32. Mareka Brown
    July 29, 2021 at 7:32 pm

    Wish I understood hard lenders sooner. Thanks!

  33. keys randy
    July 29, 2021 at 7:32 pm

    I was able to achieve big success investing and trading with tradefx_with_tulio thru iG in a short time of trade with him I made $13,000

  34. Joseph Rhodes hodgson v
    July 29, 2021 at 7:32 pm

    I got tired of people telling me how much they make from forex rather I was interested in how they made their profit and that’s how I got to where I am today. If you’re interested in making good money online through forex trading. I think you need some advice from an expert not just watching videos for that’s how I understood forex and now I earn up to $36,000 weekly from forex. If I can improve in forex trading then you too can do same. Feel free to contact Mr Marco Tulio @tradefx_with_tulio for help on Instagram, tell him I recommended him to you

  35. Le0
    July 29, 2021 at 7:32 pm

    so what did the post look like when you had to refinance your properties into a conventional loan?

  36. Joey Finrow
    July 29, 2021 at 7:32 pm

    Im curious would you use hard money loans or just raise money from your network. I am raising money from myself and my network in order to flip or just buy investment properties. Ryan what do you think?

  37. Javier Humbria
    July 29, 2021 at 7:32 pm

    Simple! Even though it is at a high level, this is the best video I've seen about Hard Money! 🔥👍

  38. B G
    July 29, 2021 at 7:32 pm

    you actually dont need to flip it. You can actually refinance it

  39. DROPOUT AND RETIRE EARLY
    July 29, 2021 at 7:32 pm

    I am making it my number 1 goal to become my very own bank and cut out the middle man, and I will loan myself at ZERO PERCENT % and ZERO CLOSING COSTS !!!! LOL !!!!!

  40. blackmagick77
    July 29, 2021 at 7:32 pm

    So up front you need a downpaent, money for points and at least a few months of interest? That still sounds ridiculously expensive

  41. Luis Espinoza
    July 29, 2021 at 7:32 pm

    Anybody got a link to the deal analyzing video Ryan discussed in the video? The link did not pop up for me when he mentioned it at 10:09 and I couldn't find it when searching on his channel.

    Thanks!

  42. Jozef Russell
    July 29, 2021 at 7:32 pm

    Dude … your giving such good information and your straight forward and very clear I love your channel

  43. Roman Vanegas
    July 29, 2021 at 7:32 pm

    Hey man i just turned 18 I’m looking to get into real state I’ve been doing sales for some years now I love the business but just wanted to say love your content lots of value, but where can I find this good ass deals your talking about ???

  44. RiskyBiscuits
    July 29, 2021 at 7:32 pm

    Thanks man! Glad to be a future OG to your channel. Your channel will go places 👊😎

  45. Dale Abella
    July 29, 2021 at 7:32 pm

    Great content as usual

  46. Michael Butler Jr.
    July 29, 2021 at 7:32 pm

    Good content my guy!

  47. Chris L
    July 29, 2021 at 7:32 pm

    How do Points Work?

  48. Omar Abouelnasr
    July 29, 2021 at 7:32 pm

    How about private money? What advantages of private vs hard money?

  49. bruce8385
    July 29, 2021 at 7:32 pm

    I would like the video of evaluating loans you content is amazing

  50. Anthony Faso
    July 29, 2021 at 7:32 pm

    Great info. Thanks for sharing