When a deal needs to close in days instead of weeks, or a property won't pass a conventional appraisal in its current condition, hard money is usually the only financing that actually works. Here's what it is, what it costs, and when it's the right call.

What is a hard money loan?

Hard money is short-term, asset-based financing. Approval is driven almost entirely by the property's value and your exit strategy — not your income, tax returns, or employment history. Lenders still check credit and look at experience, but far more weight goes on the deal itself: what the property is worth now, what it'll be worth after work is done, and how the loan gets paid off.

What hard money actually costs

Speed and flexibility come at a price. Compared to a conventional or even a DSCR loan, expect:

  • Higher interest rates — typically several points above conventional investor financing, reflecting the short term and reduced documentation.
  • Points at closing — often 1-3 points (percent of loan amount) paid upfront, in addition to the rate.
  • Shorter terms — usually 6-24 months, built around a specific exit (sale or refinance), not long-term holding.

The math only works when the speed or flexibility unlocks a deal that wouldn't otherwise happen — a below-market acquisition, a property that can't be financed conventionally as-is, or a timeline a bank simply can't meet.

What hard money lenders actually look at

  • After-repair value (ARV). What the property will be worth once the work is complete — the basis most hard money loans are sized around.
  • Loan-to-value and loan-to-cost. How much is being borrowed relative to the property's value and your total project cost.
  • Your exit strategy. Sale, refinance into a DSCR or conventional loan, or another liquidity event — lenders want a clear, credible answer before they fund.
  • Experience. A track record of completed projects can improve terms; first-time investors aren't excluded, but may see more conservative leverage.

When hard money is the right call in the Raleigh market

  • Competitive bidding situations where a fast, certain close wins the deal over a financed buyer waiting on a 30-45 day underwriting timeline.
  • Distressed or non-conforming properties that won't pass a conventional appraisal as-is — fire damage, missing systems, code violations.
  • Fix-and-flip purchases where the purchase-and-rehab budget needs to be financed together, with draws released as work gets done.
  • Auction purchases with compressed closing timelines that rule out conventional financing entirely.

Hard money vs. bridge loans

These two get confused often. Hard money is built around the asset and a value-add exit — fix-and-flip, distressed property, a fast competitive close. A bridge loan is built around a timing gap — closing on a new property before the old one sells, or before permanent financing is in place. See our full comparison for a side-by-side breakdown of when each one fits.

Getting started

The fastest path is a straightforward conversation: the property, the purchase price, your rehab or carry budget if applicable, and your exit plan. We work with multiple hard money lenders across the Triangle and can usually tell you same-day whether a deal pencils and what it'll take to close.