01
Property Value First
The lender evaluates the property's as-is value, not the borrower's income statement. An appraisal or broker price opinion establishes the collateral value that anchors the entire loan decision.
Hard Money · California Equity-Based Lending
The Asset Is the Answer.
Hard money lending approves on equity, not on employment. When the property has value and the deal has a clear path, conventional credit and income documentation are not the deciding factors.
Asset
Based Approval
Flexible
Credit Requirements
Fast
Close Timeline
Non-OO
Investment Properties
The Underwrite
How Hard Money Actually Works
Hard money is not complicated. The approval logic is different from conventional lending, which is exactly what makes it useful in situations conventional lenders cannot handle.
02
LTV Determines the Loan
The loan amount is set based on a percentage of that value. At 65% LTV, the lender has a significant equity cushion protecting the loan. The lower the LTV, the more program options and better terms available.
03
Exit Strategy Review
How is the loan getting paid off? Sale, refinance, or another asset? The lender underwrites the exit as much as the entry. A clear, credible exit is essential to closing any hard money deal.
04
Fast Close
Without the documentation burden of conventional underwriting, hard money loans can close in days rather than weeks. Speed is one of the primary reasons investors use private capital for acquisitions and distressed situations.
Where Hard Money Fits
Common Scenarios
Every situation below has been executed in Southern California. These are the cases where hard money is the right tool, not a fallback option.
→
Distressed Property Acquisition
Properties that conventional lenders won't touch due to condition, deferred maintenance, or uninhabitability. Hard money funds the acquisition so the investor can execute the rehab.
→
Credit-Challenged Borrower
Foreclosure, short sale, bankruptcy, or high existing debt in the borrower's history. If the equity position is strong and the exit is clear, the credit history is a secondary factor.
→
Notice of Default Payoff
A property in NOD needs the existing loan paid off before the foreclosure auction. Hard money executes fast enough to stop the clock when timing is the primary constraint.
→
Bankruptcy Situation
A borrower in or coming out of bankruptcy who needs to access equity or acquire a property before conventional eligibility waiting periods expire.
→
Non-Warrantable Properties
Condotels, rural properties, properties with mixed use, or unique assets that do not meet conventional property eligibility guidelines. Hard money is not restricted by agency guidelines.
→
Equity Cash-Out on Problem Assets
An investment property with significant equity but a borrower who cannot qualify for a conventional or DSCR cash-out. Hard money extracts the equity based on the asset, not the borrower.
Know the Difference
Hard Money vs. Conventional
Not a better or worse option. A different tool for a different situation. Understanding which applies to your deal is the first decision.
Hard Money
Asset-Based Private Capital
- Approval based on property equity
- No tax returns or income verification
- Flexible credit requirements
- Close in 7 to 14 days
- Distressed property eligible
- LLC and entity vesting available
- Non-warrantable properties accepted
- Higher interest rate than conventional
- Shorter loan terms
Conventional
Agency or Bank Financing
- Lower interest rates
- Longer loan terms (15 to 30 years)
- Requires income and employment verification
- Tax returns required
- Strict credit score requirements
- Close time 21 to 45+ days
- Property condition requirements
- DTI caps limit qualification
- Limited to conforming property types
What Drives Approval
The Variables That Matter
- Loan-to-Value RatioThe single most important variable. The lower the LTV, the more options and better terms. Most programs work to 65 to 75 percent of as-is value.
- Property Type and ConditionNon-owner occupied residential, multi-family, commercial, and mixed-use. Distressed condition is acceptable. Property does not need to be rent-ready.
- Exit Strategy CredibilityHow the loan gets paid off matters to the lender. A realistic, executable exit with a credible timeline is part of the underwrite. Vague exits create problems at funding.
- Title and Lien PositionThe lender needs to hold a clean first lien. Existing liens must be identified upfront. Title issues are the most common cause of delay or deal failure in hard money.
- Borrower ExperienceFirst-time investors can qualify. Experienced investors with a track record of executed exits have access to better terms and faster approvals across more lender relationships.
"If the equity is there, the deal can usually be structured."
That is the core operating principle of hard money lending. Situations that conventional lenders decline based on borrower profile, property condition, or documentation can often be structured when the equity position justifies the risk.
Twenty-plus years of California real estate and private capital means the lender relationships, the deal pattern recognition, and the structure experience are already in place. The first conversation determines whether the deal can move.
Discuss Your DealCall (562) 244-7963
Related Programs
Common Questions
Hard Money FAQ
A hard money loan is an asset-based loan where the primary qualification factor is the property's value and equity position rather than the borrower's income, credit score, or employment history. Hard money lenders focus on the collateral securing the loan. These loans are used for non-owner occupied investment properties where conventional financing is not available or not fast enough.
Hard money loans have flexible credit requirements. Credit score is reviewed but is secondary to the property's equity and the borrower's exit strategy. Borrowers with foreclosures, short sales, bankruptcies, or low credit scores can qualify when the LTV is strong and the exit is credible. This is one of the primary advantages over conventional and DSCR programs.
Hard money loans can close in 7 to 14 days when the file is organized and the property is clear. Title needs to be ordered immediately and any existing liens identified upfront. The speed advantage over conventional financing is significant for time-sensitive acquisitions, NOD situations, and competitive offer scenarios.
Yes. Distressed condition is one of the most common reasons borrowers use hard money. Conventional lenders require properties to meet minimum condition standards and will not fund properties that are uninhabitable or require significant deferred maintenance. Hard money lenders evaluate based on the as-is value and the investor's plan, not the property's current condition.
Most hard money programs work to 65 to 75 percent LTV based on the as-is property value. Higher LTV programs exist but are limited to strong borrower profiles and clear exit strategies. The LTV is the single most important variable in the hard money underwrite. Every 5 percent reduction in LTV typically opens additional program options and improves pricing.
Los Angeles County, Orange County, Riverside County, San Bernardino County, Ventura County, and San Diego County are the primary service areas. The Inland Empire, Coachella Valley, and all Southern California markets are included. All California transactions are considered. For deals in other counties, call directly to discuss the specific situation.
Equity in the Deal?
Let's Structure It.
Hard money inquiries are reviewed the same business day. Every file goes directly to Troy. No intake team, no pre-screening process. If the equity is there, the conversation starts immediately.