What is "hard money"?
We're out in the market for financing and I keep hearing this term thrown around by brokers.
What exactly is "hard money" and how is it different from normal balance sheet lending from banks or life companies?
We're out in the market for financing and I keep hearing this term thrown around by brokers.
What exactly is "hard money" and how is it different from normal balance sheet lending from banks or life companies?
+74 | Rise48 - Posts Being Removed, Speaking Only Truths | 46 | 21h | |
+61 | Help Me Understand Office Rationale Today… | 28 | 14h | |
+60 | Multifamily Outlook | 26 | 18h | |
+42 | Lender Funded Interest Reserve - Trying to Make Sense | 18 | 1d | |
+40 | Real Estate DCM or Credit Family Office | 5 | 1d | |
+31 | Seeking advice - Raising capital for the first time on a solo deal | 5 | 17h | |
+22 | Long Term Comp Prospect of CRE | 7 | 4d | |
+21 | Standing out as a new grad applying for analyst roles | 8 | 4d | |
+20 | PERE 100 / 200 2024 | 16 | 19h | |
+19 | Agency MF Underwriting Parameters Re: CNA | 1 | 2d |
Career Resources
1. Hard money can be a deposit you put down for debt or a purchase that’s non-refundable. Known as “going hard”.
2. Hard money can also be your more senior debt. At least in affordable, your soft financing is your gap- usually subsidies from local municipalities. It’s soft because it’s subordinate to the hard money, and it’s also usually forgivable.
may be able to help a bit more if you can provide a bit of context as to how they’re using the term?
Non-refundable deposit needed to secure a PSA with seller. They do it so that they know you’re acting in good faith and not to waste seller’s time.
It's a dogshit loan product for desperate buyers. double digit interest rate with exorbitant fees (2+ points plus prepay penalty in most cases). in most environments its only used for smaller deals or to take down land/pre-dev period to bridge you to construction/reno. In today's environment, most lenders are charging hard money rates cuz they can and capital markets are mega f'ed.
This is the correct answer
hard money is similar to bridge debt (but even more flexible), when your asset is not yet perm financing ready. You get shorter term, higher rates and they will look at borrowers with not the best credit history, borrowers with hair if you will
How does a retail investor get to participate in the action without 1) being a part of an institution and 2) having to become what would essentially be a loan shark.
they raise money on a deal by deal basis. just call the company up and say you want to invest.
Quo reprehenderit magni minus consequuntur consequatur. Sequi ut libero consequuntur ut. Dolores enim qui laudantium blanditiis autem. Alias expedita officiis unde sunt eius. Quas iure et ratione cupiditate aut. Deserunt porro qui iure corporis laboriosam enim.
Veritatis quo quidem suscipit ut sit magnam. Et numquam saepe voluptatibus aliquid nam eligendi. Quidem ab aut saepe mollitia voluptatem magnam doloribus.
Sed incidunt est autem ut facilis vero error. Earum voluptatibus quidem iste est rerum odit aliquam.
Qui autem earum maxime dolor laborum sit neque. Aut enim placeat esse ipsa ab velit. Facere exercitationem ut eos. Cupiditate eos porro soluta sequi eaque. Id rem recusandae magni autem qui perferendis.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Voluptas excepturi error voluptates porro aut. Alias enim rerum nesciunt et tempora dolorem ex. Dolorum quis sapiente impedit impedit sequi doloremque perferendis. Pariatur quaerat quia est id saepe unde adipisci. Perspiciatis modi sint tempora alias. Tempore accusantium vitae fugit dolorum maiores tenetur autem. Ex quia qui ipsam mollitia quibusdam.
Eaque sed consequatur velit veritatis ut. Quaerat est aut aut et omnis. Et consequatur omnis magni odit tempora. Quasi eos optio molestiae aut voluptatem.