Recently it came to my attention that many people confuse private money lending with hard money lending. The term hard money came about during the Great Depression when banks withdrew from loaning their funds. Private individuals started to lend their money for many different reasons, real estate being chief among them. The reason it's called "hard" is either because it was difficult to get, or it was "hard cash" or "hard" to find, no one knows for sure.
Hard money lenders charge much higher interest rates than banks and usually require less money down. You also do not have to qualify for the loan, it is asset based. The more the property is worth the more the lender will lend.
Private lenders loan their money as an investment in real estate and expect a return that is agreed upon in advance. It is a very flexible and simple system to create massive wealth if done properly.
Private lenders may lend money to hard money lenders, however if you do, you should know in advance and have your loan secured by the real estate (preferably in a first position). Secure, profitable, real estate is our goal and our guarantee.
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