What is “hard money”, “private capital” and/or a “rehab loan”?
“Hard Money loans”, also called “rehab loans” and “private capital loans”, refer to non-conventional real estate loans. Private capital sources and specialty lenders usually fund them.
Interest rates and points on such loans are usually higher. Terms usually range from 6 to 12 months.
These types of loans have one basic requirement.
There has to be some substantial equity in the property to give the lender a reason to invest their funds in an otherwise risky venture.