Hard Money Basics
How Do Hard Money Loans Work?
No jargon and no sales pitch. This is how we explain it at the Averlend desk, with the math that matters.
Hard Money Basics
The short version, then the substance.
Key Takeaways
- Step one: the asset gets underwritten
- Step two: terms, documents, close
- Step three: the term and the exit
Step one: the asset gets underwritten. You submit the collateral, the numbers, and your exit plan. The lender values the asset, confirms the lien position is clean, and sizes the loan as a percentage of value. At Averlend that can run up to 90% of the deal.
Step two: terms, documents, close. You get a term sheet with the rate, points, term, and structure. Sign, the lien gets recorded, and the wire goes out. On a clean file this whole arc takes days.
Step three: the term and the exit. Most hard money runs 12 months, interest-only, with the principal retired by your exit: a sale, a refinance, or stabilized cash flow. The loan is a tool with a built-in clock, and good borrowers plan the exit before they take the money.
The South Texas angle. Averlend underwrites this every week in Corpus Christi and across Nueces County. If you are working a deal in downtown or anywhere else in the metro, the theory above comes with a local desk attached: see our Corpus Christi lending page or send the deal directly.
Questions
Quick answers from the Averlend desk.
The Averlend Promise
Reading is free. So is a deal analysis.
Send the collateral, the numbers, and the exit. An Averlend rep will reach out ASAP, same business day.