ServicesHard Money Loans
Hard Money Loans in San Marcos
We arrange short-term, asset-based loans for investors buying property that needs work or a fast closing. The loan is sized on the property and your exit plan, not your tax returns, and we explain every point, fee and draw before you sign.
What a hard money loan is, and when it fits
A hard money loan is a short-term loan secured by a first lien on investment property. Underwriting starts with the property's value and how you plan to pay the loan off. It does not start with your W-2s. That is why it can fund a property in a condition, or on a timeline, that a conventional loan won't accept.
It is the right call for a few specific jobs: buying a property that will fail a standard appraisal, funding a fix-and-flip with a renovation budget, or closing quickly while longer-term financing is lined up. It is the wrong call for a primary residence or for a borrower without a realistic exit. If that is your situation, we will tell you plainly and point you toward conventional loans, FHA loans or another fit.
Many investment properties come with a history, such as a hail-worn roof or old water damage. We help you document that condition and understand how insurance fits into the loan, without stepping into the adjuster's role.
What we work through on a hard money loan
- 01
As-is and finished value
We look at what the property is worth today and what it should be worth once the rehab is done. The loan amount is set against both numbers, so you know how much of the purchase and the renovation budget the loan can carry.
- 02
Rehab holdback and draw schedule
Renovation funds are usually held back at closing and released in draws. Each draw follows an inspection of completed work, because the lender only funds work that exists on the property. We help you build a draw schedule that matches how your contractor actually sequences the job.
- 03
Interest-only terms and a defined exit
Most hard money loans run short, with interest-only payments and a balloon at maturity. Before closing, we map your exit: a sale, or a refinance into a conventional loan or a bank statement loan once the property is stabilized.
- 04
Coverage requirements and damage records
Lenders typically require a builder's risk or vacant property policy with the lender named as mortgagee. On a damaged property, we help you assemble dated photos and a written scope at closing, and we explain how loss payments are usually made out to both owner and lender.
- 05
Title and closing coordination
We work with the title company to clear existing liens and confirm first-lien position. You see the settlement figures before closing day.
Questions about Hard Money Loans?
Call(512) 812-9583Signs a hard money loan is the right tool
The property won't appraise as-is
A missing kitchen, active roof leak or foundation movement will stop most conventional and government loans. A hard money loan can fund the purchase and the work that fixes those problems.
The seller wants a short closing
Distressed sales and estate sales often favor the buyer who can close fast. Asset-based underwriting skips much of the income paperwork that slows a standard loan.
You have a clear rehab scope
You know what the property needs, roughly what it costs and what it should sell or rent for afterward. That is the plan a hard money lender wants to see.
Storm damage comes with the property
If you are buying after a hailstorm or flood and the seller has a claim open or already paid, you need to know where those proceeds go. We help you sort out the documents before closing so the money and the work line up.
Long-term financing just needs time
Sometimes the right permanent loan is available, but not on the seller's schedule. A short hard money loan can bridge that gap, and a refinance follows once the property qualifies.
How a hard money loan moves from call to closing
- 1
A rate quote by phone
Tell our loan officer the property address, purchase price, rehab scope and how you plan to exit. We give you a rate quote and an honest read on whether the deal works.
- 2
Property review and term sheet
We order a valuation and lay out the leverage, rate, points, term and holdback in writing. Nothing moves forward until the numbers make sense to you.
- 3
Documents and coverage
We collect the purchase contract, your entity documents, the scope of work and an insurance binder. For damaged properties, we add dated condition photos and any adjuster paperwork.
- 4
Closing and draws
You close with the title company and the purchase funds. During the rehab, you request draws as work is finished, an inspector verifies it, and the funds are released.
What moves the cost of a hard money loan
Hard money costs more than a conventional loan because the lender is taking on property and timing risk a bank won't. Your cost comes from the rate, the points paid at closing and fees tied to draws or extensions. We list each one on your term sheet so you can run your profit with real numbers.
- Leverage
- The higher the loan amount against the property's value, the more risk the lender carries. More cash in the deal usually means better terms.
- Rate and points
- Points are paid up front at closing, and the rate drives your monthly interest-only payment. A lower rate with more points can cost more on a short hold.
- Term and extensions
- Shorter terms often price better, but an extension costs money if the work runs long. Pick a term with room for permitting and contractor delays.
- Scope and property condition
- A larger renovation means more draws, more inspections and more risk. Foundation, roof or water damage can change both the valuation and the coverage the lender requires.
- Your track record
- Borrowers with completed flips or rentals often see better leverage and pricing. First-time investors can still qualify, usually with more cash in the deal.
Hard money loan questions
Can I use a hard money loan on a house I plan to live in?
Generally no. Hard money loans are business-purpose loans for investment property, and owner-occupied property falls under different lending rules. If you plan to live there, conventional loans, FHA loans or VA loans are the place to start, and we can walk you through those.
How do you figure the loan amount?
We start with the purchase price, the as-is value and the projected value after the rehab. The loan is capped at a share of those numbers, and part of it may be held back for the renovation budget. Your down payment covers the rest, plus closing costs.
The property has storm damage and an open insurance claim. Does that stop the loan?
Not necessarily. We need to know whether the claim is open or paid, who is named on the policy and whether any proceeds transfer with the sale. We help you gather the adjuster's file and condition photos, but the insurer and adjuster make the decision on the claim itself.
What happens if my rehab runs past the loan term?
Most loans allow an extension for a fee, but the terms vary. Call us as soon as you see a delay coming. That gives us time to look at an extension or an early refinance before the balloon comes due.
Does my credit matter?
It is reviewed, but the property and your exit plan carry more weight than they would on a conventional loan. Recent foreclosures or open liens can still affect terms, so we look at your full picture on the first call.
Can I refinance out of a hard money loan later?
Yes, and that is a common exit for investors who keep the property as a rental. Lenders often want the property stabilized and owned for a set period first. We plan that refinance from the start so the timeline holds up.
Run the numbers on your next deal
Bring the address, the price and your rehab scope. We will give you a rate quote and tell you honestly whether hard money or a bridge loan fits better.