A hard money lender in the world of real estate is a lending company, or a group of investors who have joined with the purpose of providing funding to brokers, construction development companies, real estate investment firms, or commercial real estate property owners. This type of loan is is based on a collateral, generally property, that has a real, hard value.
The amount of the loan can range between 60% and 80% of the asset's current market value (or 50 to 70% of 'after repaired' value), but will rarely exceed this range as the funding group must be able to realize a profit, should the sale of the property become necessary. In most cases, the hard money lender takes up first lien position in the order of liens against the property, and would become the first entity to be satisfied in the event of any sale.
The amount of the loan can range between 60% and 80% of the asset's current market value (or 50 to 70% of 'after repaired' value), but will rarely exceed this range as the funding group must be able to realize a profit, should the sale of the property become necessary. In most cases, the hard money lender takes up first lien position in the order of liens against the property, and would become the first entity to be satisfied in the event of any sale.