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What is a Hard Money Loan?

By November 22, 2016June 29th, 2023Blog, Hard Money Loans
Hard money loans

Finding the ideal investment property is no easy task, it can take days, weeks, or months. To compound the problem, once you do find it, the first thing you notice is that it needs so many repairs that no conventional bank is likely to offer you a mortgage on it. This is where a hard money loan in Los Angeles comes into the picture. The big question is, “What is a hard money loan and what are the benefits of this type of loan?”

quite simply, a hard money loan in Los Angeles is like any other form of loan. The lender agrees to loan you a lump sum of money that you agree to pay back plus interest over a given amount of time. The exact terms of this type of loan vary from one lender to another and from one loan to another.

The loan will continue to accrue interest each month until it has been paid in full. The lender may or may not charge the borrower an up-front one-time processing fee to originate the loan. The loan is secured by a physical asset, which in this case happens to be the property the money was used to purchase. Hard money loans may be offered by individual investors or by an investor group.

Who Typically Makes Use of Hard Money Loans in Los Angeles?

The most common use for hard money loans in Los Angeles is the real estate investment market. Since real estate investing is still considered a risky proposition at best, many banks and other financial institutions report that making these types of loans leaves them feeling less than comfortable. These institutions prefer to make loans to those making “stable” investments because they feel there is a much greater chance of the loans being paid back.

Thus, if a real estate investor is looking to purchase a “distressed” property, their options are fairly limited when it comes to finding someone who is willing to finance them. Most real estate investors who are interested in rapid flipping of the properties they buy or plan to do a major rehab on the property turn to a hard money loan in Los Angeles.

Those who are unable to secure a standard mortgage from a bank or traditional lender due to bad credit may also turn to a hard money lender in Los Angeles. While they may have poor credit, as long as there is sufficient equity in their home, they should be able to secure the money they need from a hard money lender. For further information, inquiries or to schedule a consultation please contact PB Financial Group, leading hard money lender in Los Angeles, at 877.700.3703 or visit

PB Financial NMLS #357614/DRE #01522495

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