How Do Hard Money Loans Work?

Hard Money Lenders (Home) » Blog » Uncategorized » How Do Hard Money Loans Work?

How Do Hard Money Loans Work?

If you’re a real estate investor who needs financing for your next project, you’ve probably found yourself asking the big question “how do hard money loans work?” This type of loan could be a strong option for your next real estate transaction. Let’s take a look at how this type of financing works and how you could potentially benefit from a hard money loan.

How Do Hard Money Loans Work Differently from Conventional Loans?

Hard money loans are meant to be paid back quickly, in a few months or just a few years. While most loans provide long-term financing in terms of 10, 15, or 30 years, hard money loans are a short-term financing mechanism. They are ideal for fix-and-flip projects because you can use the loan to finance the real estate purchase and renovation, then potentially sell the property for a profit and pay back your lender.

Hard money loans are similar to traditional loans in that the property you’re using the loan to buy serves as collateral for the loan. If you default on your loan, your lender could take ownership of the property. In a hard money loan situation that involves a renovation, it is important that the contractor responsible for the renovation prepare a thorough estimate of costs prior to the issuance of the loan, as the hard money lender will determine what expenses they will approve.

Qualifying for a Hard Money Loan

Unlike traditional loans from a bank or credit union, you’ll have to go to a private lender to obtain a hard money loan. Each private lender varies when it comes to the terms, rates, and fees of these loans.

Hard money loans usually contain more risk for a private lender. Generally, you won’t have to meet such strict requirements to qualify for this type of loan, as most private lenders won’t take a deep dive into your credit history or your debt-to-income ratios. However, you can expect to pay higher interest rates that are usually in the 7% to 15% range.

If you’re looking for 100% funding for your real estate investment, hard money loans are probably not the way to go. Usually, a private lender will require a 20-40% down payment. If you are able to find a lender who will finance 100% of your real estate purchase, you can expect there to be extremely high interest rates, substantial fees, or perhaps even an equity participation arrangement. The exception would be if you have a long and proven track record for being able to make a substantial profit by rehabbing properties.

How Do Hard Money Loans Work?
How Do Hard Money Loans Work?

The Advantages of a Hard Money Loan

If you need a quick financing option with minimal hassle, a hard money loan could be great option. The underwriting process is much shorter than a traditional loan, and a hard money loan could make it easier for a real estate investor to compete against all-cash offers for a particular property. If you’re in a bidding war for a property, a hard money loan with a quick closing time could maximize the chances of the seller accepting it.

Breaking into the real estate investing game can be difficult if you don’t have a strong credit score. If you’ve had financial issues in the past which have lowered your credit score, it won’t necessarily hurt your chances of getting a hard money loan. Unlike traditional lenders, hard money lenders are more concerned with the value of the underlying real estate asset than your credit history.

Get Your Hard Money Loan from a Lender with a Proven Reputation

Are you looking for an established hard money lender in San Diego? If so, Wilshire Quinn may be able to help. Whether you’re an experienced real estate investor or you’re purchasing your first investment property, Wilshire Quinn can help facilitate your next real estate transaction in a matter of days, not months. A Wilshire Quinn representative can walk you through their lending process and give you immediate feedback on your loan scenario. Please contact 619-872-6000 or visit for more information on rates or to submit a loan request.

  • Funding in 5-7 days on average

  • Loan Amounts from $200,000 to $20,000,000

  • Commercial & Residential (non-owner occupied) Real Estate

  • Purchase, Refinance, Rehab, Cashout Refinance, Fix-n-flip, Blanket Loans

  • Foreign Nationals Okay

  • Loan Term: 3 – 24 months


Los Angeles hard money lender in Yahoo Finance
Los Angeles hard money lender in Yahoo Finance
Los Angeles hard money lender in Investor Place
Los Angeles hard money lender on NBC
Los Angeles hard money lender in FOX News

About Wilshire Quinn

Wilshire Quinn is a San Diego hard money lender focused on short term bridge loans, secured by first trust deeds. The company is based in San Diego, CA with offices in Los Angeles and San Francisco. Wilshire Quinn typically funds loans for their customers in 5-7 days. Their successful track record is closely linked to their ability to make immediate lending decisions based on their highly disciplined underwriting approach. The company funds a variety of loans such as: refinance, purchase, blanket, rehab loans, 1031 exchange, partnership buyouts, and more. They originate hard money loans ranging from $200,000 – $20,000,000. Wilshire Quinn works with commercial and residential buyers nationwide.

Loans are made or arranged by Wilshire Quinn Income Fund, LLC pursuant to California Finance Lenders Law license #603J060. Wilshire Quinn Capital, Inc. serves as manager of the Wilshire Quinn Income Fund, LLC. The information above is deemed reliable but is not guaranteed. Portions of the loan described above may be sold to third party purchasers and does not necessarily reflect the amount held in the Fund’s loan portfolio. Nothing contained in the information above is an offer or solicitation for the purchase or sale of any security. Any such offer to purchase securities will be made only through the Offering Circular for the Wilshire Quinn Income Fund, LLC.

Recently Funded Hard Money Loan Transactions

San Diego hard money lender - private money lender
El Monte, CA

Loan Amount: $4,750,000
Loan Type:  Refinance
Property Type:  Industrial
Loan-To-Value: 60%
Term: 12 Months

San Diego, CA.

Loan Amount: $765,000
Loan Type:  Refinance
Property Type: Single Family
Loan-To-Value: 60%
Term: 12 Months

los angeles hard money lender santa monica deal
Santa Monica, CA
Newport Beach, CA

Loan Amount: $3,725,000
Loan Type:  Purchase / Rehab / Blanket
Property Type: Single Family
Loan-To-Value: 45%
Term: 12 Months

Submit a loan application

Partner with a Hard Money Lender you can trust.

Call Now ButtonCall Now