How To Use Hard Money For Fix and Flips


To get money to flip a house the best way is a hard money loan.  Hard money loans are the faster way to get funding, even with bad credit.

Once overcoming the struggling that was there in the beginning when it came to finding the financing needed, it only took a short period of time to be able to come up with a terrific routine that truly helps out with financing the fix and flips.

However, realizing there are many others out there who are still struggling to find the money they need in order to be able to finance fix and flips, it was decided that the best thing to do to help them would be to create this, the best way (which by the way works wonders) to make use of private money, and portfolio loans to help with financing those flips.

There is one more way however, and that is to make use of hard money as well, to be discussed later in this article.

This routine has helped in turning anywhere from 10 to 15 fix and flips a year, and then using a little of that to reinvest in rental properties, which are the long term profits. Yes, financing in fix and flips is a good way to earn a living, but it’s preferable to take advantage of the long term profits.

This is because they will continue to bring in profits, building up the nest egg. Just keep in mind that there are several different ways to get the finances needed to fix and flip, but the thing about them is that most of those ways are going to be way to expensive, they were expensive before this routine was started, and they still are.

You are probably asking about now, how do I locate these fix and flips?


The hardest part of accomplishing fix and flips is being able to locate the properties. Once the properties are found, all that is needed is to work at getting them for as little as possible. Remember, they have to be cheap enough that they are going to be worth flipping.

What is the reason long term financing isn’t used on fix and flips?

Long term financing is swell for long term rental properties, but not if there is more than 4 mortgages involved. It’s fairly easy to get a loan from a bank for long term financing because this is how banks make money, now if it is going to be for short term the bank isn’t going to make enough off of it to be worth their time.

Since fix and flips have usually sold in under a year’s time, banks consider this short term, they don’t like it when someone pays off a long term loan quicker than expected either. There is short term financing available, however it is hard to find and very expensive.

What does short term financing offer when it comes to fix and flips?

This is where the discussion about hard earned money comes into play. Short term financing is where hard money, portfolio money, and private money can be used. Since short term loans are paid off a lot quicker, there is a shorter time period for the lender to make money off the interest. It is also much more costly and riskier. However, it isn’t too hard to get a short term loan, and this is why it is helpful.

How to use hard money to finance fix and flips:


Those who loan out Hard Money provide short term loans that are expected to be paid back in less than one year, usually. There terms can be flexible, but in return they are very costly. Lenders for Hard Money normally charges 12 to 18% interest, and on top of that they also charge 2 to 5 points on the loan.
Whereas, one point would be 1% of the loan amount, that is charged on the loan amount, and then added to the interest, and the loan itself.

How much money do you have to put down for a Hard Money Loan?


Using a Hard Money Loan to purchase property means there doesn’t have to be much money put down. The loan is based off of what the value of the property will be after it is fixed and gets flipped.

For instance, if a house was purchased for $75,000 and it is actually worth $150,000 once repaired, then the repaired value of $150,000 is the amount the lender would base the Hard Money Loan on. Meaning it is possible to get a loan for the purchase price plus some additional to take care of the repairs.

A Hard Money Loan financed at 65% of the after repair value (ARV) on a house, would look like this:

  • Cost to purchase $75,000.
  • After repair value (ARV) $150,000.
  • Will need $30,000 in repairs.
  • Amount of loan at 65% of the after repair value (ARV) = $97,500.
  • Which means that the total cost of purchasing the house, plus $22,500 of the cost of repairs was financed.

The additional costs include the charge for 4 points of $3,900 plus, the charge for the 14% interest of $6,825 over a six month period.

Depending on the lender they may have additional fees such as for appraisals, and most of the Hard Money Lenders do not lend nationwide.

How to use Private Money for financing fix and flips:


Private Money is money that comes from friends and/or family members, it can be a loan, gifts, and even investments on their behalf. These Private loans can be used to finance a small portion of the fix and flips cost, such as towards the down payment, or on the cost of repairs.

Will getting loans for fix and flips affect being able to purchase properties?

Cash offers are more appealing to a seller and there are no conditions on the loans, and no appraisal contingencies in the offers and that makes it possible to offer cash. However, one can get a lot more property with loans.

Fix and flips using refinancing and/or a credit line:

Of course there is always the option of using any equity one has in real estate they already own for the cash needed to fix and flip, this is referred to as refinancing.

It is possible to borrow up to 95% of the property’s value from certain banks. These will usually be in the form of a credit line (cheaper), or refinancing (more expensive), but comes with a variable rate that is higher.

Fix and flips can be done as a partnership:

Fix and flipping can also be done between two partners. This can help out in the beginning on the financial part. The partner provides the capital for a profit of the flip.

To Sum things up:

The thing most find difficult in the beginning is finding a way to finance the fix and flips. If using a Hard Money Lender be sure to calculate all the costs a head of time, this type of lender may end up doubling or even tripling your cost of financing. The best lenders will be a Portfolio or a Private Money lender.

Hard Money Loan vs. Mortgage

Hard Money Loan vs Mortgage

Hard Money Loan vs Mortgage

If you want to know how hard money loans are different from mortgages, this post is for you!

Both lending sources are options for home buyers and real estate investors.

In this post we will outline the difference between hard money loans and mortgages.

Hard Money Loan vs. Mortgage

If you’ve found a property that you’d like to buy but need financing you’re likely considering one of two options.  Either you’re going to go for a conventional mortgage or you might be considering a hard money loan.  Most adults that have financed a car or a home understand how bank mortgages work.  But less adults know what hard money loans are or how-to quality for one.

1. Difference In Time To Get Financed

One of the biggest differences is the time it will take to get financing and purchase the property you’ve found.  When it comes to conventional mortgages it will take weeks, a month, or more to close.  When you get a hard money loan you’ll be closing on your new property in usually about a week or less.  If you’ve found a hot property getting the financing squared away faster than other buyers is a huge edge.  This is especially true if you’re investing in real estate and a prime property has just come on the market.

2. Duration Of The Loan vs. Mortgage

Mortgages are typically set up for 30 year fixed interest rates.  These loans are full amortized and much longer term than hard money.  In contrast a hard money loan have a duration of usually a year or less and are interest only.  At the end of the year many investors have sold or owners can now refinance.

3. Where The Money Comes From

Traditional mortgages get their money from lenders and banks who sell loans to larger banks or to various investors. In contrast the money for hard money loan generally comes from a private lender.  Some hard money lenders use lines of credit or investment funds where others are individual investors.  In the case of Brad Loans; we fund our loans ourselves.

4. Loan Or Mortgage Approval

In hard money lending collateral is the most important factor.  It overcomes issues with bad credit or no credit.  If you have enough income, the property you’re buying has enough value, and your collateral property is worth enough, you’re likely going to get approved.  In hard money lending the loan to value or LTV is an important factor.

You’ll need to have a down payment ready to cover a portion of the property’s cost or be ready to have cross collateral with additional free and clear paid off real estate to put up against the loan.  This is done to make it easier for the lender to have a high degree of certainty that they’ll get their money back.

5. Difference in Interest Rates

Hard money lending is many times done at higher interest rates.  This is because it is used for properties that are distressed and in cases where lenders have less than perfect credit.  In addition, the loan terms are much shorter and lenders need higher interest rates to justify making the loans.  Banks that chip away at you for 30 years collect more money, just slower over a longer period of time.

Hard Money Loans by Brad Loans

If you’re looking for financing for a property in the Phoenix Valley; Brad Loans is your source for fast hard money loans.  We process your application quickly and get you the money you need for the new home or investment property you need.

Call 602-999-9499 or Contact Us

Funding Your First Hard Money Loan


This post includes some Key Factors in investing, especially for all ‘new investors’. In fact, anyone that is planning on investing using a ‘Hard Money Loan’ should Read This First!

Real Estate investing for the first time using a Hard Money Loan

The most important deal in your career of real estate investing is going to be that first investment. That first real estate investment, because it’s that first investment you do in purchasing real estate that will open doors for you. Generally, that first investment has more of a success rate with those who use a Hard Money Loan.

Why is the first real estate investment more successful with a Hard Money Loan?

The answer is simple: New investors have trouble in getting their first loan or two, until they have established a little capital, and a Hard Money Loan is basically the only type they will be able to get until that happens. It’s best to think in terms of a tourist when investing, that is to say; New investors who are about to invest in real estate needs to think in the same matter as a tourist thinks when planning to take a trip.

New investors need carefully plan all the right moves, deciding on the strategy to use, how to get the most for your money, which real estate is going to bring in the most profit for the least amount, and etc., another important factor would be what is the real estate’s value on the market. Keep in mind, that it is much easier to get a Hard Money Loan in some states that it is in others.

This is partly due to the different variations of the real estate laws in each state, many of which seem to be hostile towards investing in real estate, as well as being against the process of the Hard Money Loans. Of course, with due process of the law being put in place by our very own congress, I’d say that is where the blame should be pointed.

In other words, it will help to learn of all the different states and their laws on real estate investing, knowing what’s going to be there for you when doing investments in those states, and know if they are going to be available to you when investing in real estate using the Hard Money Loans.

Learn what the states are more likely to approve the Hard Money Loans, and know the hottest areas for new investors are. Don’t forget to check-out how they are doing in the market, and the places you’re more likely to be approved for the Hard Money Loan.

7 Best Arizona Cities For Real Estate Investments

The best Arizona cities for real estate investments, might surprise you.  If you’re looking for the best markets to invest in real estate in Arizona, you’re not alone.  Arizona is a hot bed for real estate activity but these 7 cities in Arizona are the best for real estate investments.  Each of the cities in this list have been ranked by real estate guides and experts as being growth areas that should appreciate in value.


As one of the strongest real estate investment areas Laveen boasts less than 1 percent vacancy rate.  Add to that the neighborhood has an average rental return of over 11% it’s clear why Laveen is a great place to look for real estate to invest in!


Scottsdale might be part of the valley, but it is a unique suburb and attracts people from all walks of life.  With exciting nightlife, highly rated restaurants, amazing hotels, and unique western flair its not surprise that many visitors choose to make Scottsdale home.  As a desirable area in the valley the real estate investing opportunities are in no short supply!

Queen Creek

Queen Creek has grown in popularity due to both closeness to the Mesa Airport and real estate costs.  With it being such a popular area, the vacancy rate is low and returns for rental properties are virtually as high as Laveen.

El Mirage

El Mirage has benefited from growth due to its great affordability.  In fact the median home value in El Mirage is below $110,000.  The area is home to over 30 restaurants, coffee shops, and bars.  If you’re seeking a prime opportunity, El Mirage might have the property you’re seeking.

South Phoenix

South Phoenix also boasts a very low vacancy rate and healthy return rates on rentals.  South Phoenix is also close to popular attractions such as the zoo, Botanical gardens, and Tempe with Mill Ave and Tempe Town Lake.  This makes South Phoenix a great place for investors to snatch up properties to renovate, rent, or to sell.

Maricopa City

Maricopa city has also seen an increase in residents which has dropped the vacancy rate below 1 percent.  With approximately a 10 percent return for real estate investments Maricopa City is a great place or investors to seek opportunities.


While Tucson is a ways south of Phoenix, it is still a great opportunity for real estate investors.  With 3 national forests near by, great culture, and mild climate its no surprise that Tucson is a growth market.  It attracts both buyers and renters from all over the country!

Real Estate Investment Loans

Finding the property it step one, getting it financed is step two.  Brad Loans offers real estate investment loans and gets the job done faster than traditional banks.  With programs for both real estate investments and fix and flip options our team can help you get the financing you need quickly.  As a hard money lender we also don’t require the mountains of red tape traditional banks do.  Click here to: Start your real estate investment loan application today!

Many Hard Money Lenders will ‘FORGET’ to let you know these things:

Other Hard Money Lenders are not going to be too happy about me giving this information out, however, I just feel that by not telling this it would be the same as deceiving people. I have become quite tired of hearing how some of the Hard Money Lenders take advantage of investors, yes, new investors especially. They do this by giving them information that is not in its entirety, anything that will rush the close of a deal.

What makes it worst, is when they fail to give any information at all. For example, there are expenses incurred when making a purchase for property that is not included in the loan itself, the Hard Money Lenders doesn’t mention this part up front. Lenders hardly ever will mention that there will be other fees and charges that you, the investor must come up with, and that is why this is being written on your behalf.

100% Financing, yes, there are three different types:

I have heard that most new investors thought there was only one type of loan that offered 100% financing on real estate investments, this is not true. Actually, there are three types of loans that offer 100% financing on real estate investments. You have nothing to feel awful about, it wasn’t your fault the lenders held back important information such as t his. The main reason for bringing this up now is because nobody else is going to.

If you already know this, that’s great, but, if you don’t, listen-up; only a small majority of Hard Money Loans will cover anywhere from 60% to 75% of the value on the property to be purchased and/or the value of the property after the necessary repairs have been made.

In a case where you have stumbled upon a terrific deal, the Hard Money Lender can decide to finance it 100%. Which brings us to the first type of 100% financing.

100% Financing – Type (1):

This type covers 100% the property cost, no more, no less. However, there are other fees involved, and the do add up, and  fast. Here are some of what those fees are: Closing costs, repair costs, earnest money, escrow, insurance fees, mortgage insurance fees or title insurance, among a few others that could come up.Usually, when lenders refer to 100% financing this is the one they’re referring to.

100% Financing – Type (2):

Occasionally a Hard Money Lender will finance 100% on the purchase price, plus the repair costs involved, and sometimes even the closing costs, of course, it would have to be some fantastic deal you got a hold of for this to happen. However, as the investor you would still be accountable to come up with the other fees, such as: The closing costs, earnest money, inspection fees, evaluation fees, insurances, and etc..

100% Financing – Type (3):

This one is referred to as the ‘Holy Grail’ of investment financing,. It does just what it says: Gives 100% financing that covers ‘EVERYTHING’, and I mean everything. The price of the property to be purchased, repair costs, earnest money, insurances, escrow, closing costs, ‘EVERYTHING’. This will be the only financing option available that offers the investor the opportunity to land a deal without any upfront cost out of their own pocket. You’ll not find this type of financing offered by many, yet, we offer it to you.

Before giving an explanation on how we can offer a true 100% financing to clients let’s first explore the importance of the starting money:

You could take $1,000 dollars and turn it into $10,000.

The following is an itemized table of everything:

Common Starting Money Items
Item Cost
Earnest Money $500 – $1,000
Evaluation $600
Inspection $500
Total: $1,600 – $2,100

These are among the most common things to be over looked during the process of a Real Estate Loan:

  • Repair costs
  • Earnest money
  • Insurances
  • Escrow
  • Closing costs
  • mortgage insurance fees
  • title insurance.
  • Home owners insurance

There are a few more of these as well…

Phoenix Hard Money Lender

Our mission is to always have your wishes and interests in mind, and our goal is to keep a satisfied customer by ‘opening the door to their financial freedom’, and so that our customers will return to us the next time they need a loan. Furthermore, we do not anticipate gain from any of customers. Our gain will come from treating our customers fairly, and in due time.

When we hold our heads up its not to look into the clouds, but because we can feel proud, and good about the way we do business. By helping you succeed the first time around, we are hoping that you will return again, and again, and even tell of your great experience to all your friends and family so they’ll also come to us.

Give us a call today if you are interested in hard money loans for fix and flip, finishing construction,refinancing your mortgage, buying land, or need loans for other investment opportunities but have bad or no credit. Give Brad Loans a call today at (602) 999-9499.

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