What is a Hard Money Loan and When Should You Use One?

What is a Hard Money Loan?

A hard money loan is a short-term, asset-based loan typically used to finance real estate investments. Unlike traditional bank loans, hard money lenders focus more on the value of the property than your credit history. That means faster approvals, fewer hoops to jump through, and a better shot at getting funded quickly.

Hard money is often used for:

• Fix and flip projects

• Ground-up construction

• Bridge loans

• Rental property acquisitions

Why Real Estate Investors Use Hard Money Loans

1. Speed is Everything

Traditional bank loans can take 30–60 days to close. That’s too slow when you find a great deal. Hard money lenders—like Alvear Lending—can close in as little as 7–10 days, giving you the edge in competitive markets.

2. Properties That Need Work

Banks don’t love beat-up houses. If you’re buying a fixer-upper, a hard money loan like Alvear Lending’s Fix and Flip program can fund both the purchase and renovation. It’s tailor-made for value-add projects.

3. New Construction Funding

Building from the ground up? Hard money can cover the cost of the land and the full construction budget. Our Ground-Up Construction program is designed for investors and small builders tackling new builds.

4. Bridging the Gap

Sometimes you just need a short-term loan to bridge the gap between buying and long-term financing or selling. That’s where our Bridge Loan program comes in—fast, flexible, and perfect for in-between moments.

5. Scaling Your Rental Portfolio

Buying a rental property? Start with a hard money loan to acquire and rehab, then refinance into a long-term DSCR loan. Our Single Property DSCR program lets you qualify based on the rental income—not your W-2.

Pros and Cons of Hard Money Loans

Pros:

• Fast approvals and funding

• Flexible qualification (less focus on credit)

• Can finance rehab or construction

Cons:

• Higher interest rates and fees

• Shorter loan terms (usually 12–24 months)

• Not ideal for long-term holds unless followed by a refinance

Where Alvear Lending Lends

We currently do not lend in California, Arizona, New York, or Nevada, but we’re active in many other real estate markets across the U.S.

Hard Money Loan FAQs

Is a hard money loan the same as private money?

Not exactly. Hard money lenders are usually professional lending firms, while private money may come from individuals like friends or family.

Do I need good credit to get a hard money loan?

Credit matters less than the deal itself. We focus on the property value and exit strategy.

How fast can I close?

In most cases, 7–14 days. Sometimes faster.

Book a Call With Alvear Lending

Got a deal in mind? Not sure if hard money is the right tool?

Book a call with Alvear Lending and let’s talk through your goals. We’ll help you figure out the best funding strategy for your project.

Written by: Jay Sookhakitch

Optimizing how real estate investors approach capital markets and build smarter portfolios.