The California Investor
Hard Money Loans
By JC Pacific Corp Last updated 2026-10-02
A hard money loan is short-term financing from a private lender or investor, secured by the property itself, with underwriting that emphasizes the deal and the property over your credit. It is fast and flexible, and it is expensive, with high rates, points, and short terms.
Run the numbers
Estimate total project cost, net profit, ROI, and break-even sale price for a flip.
Open the Fix & Flip CalculatorHow Hard Money Works
The lender advances a percentage of the property's value or after-repair value, you pay interest monthly on the balance, and the loan is repaid when the property sells or is refinanced. Because the property is the collateral, funding is faster and qualifications are looser than banks.
When Investors Use It
- Fix-and-flip purchases where speed wins the deal
- Auction and distressed purchases that need fast cash
- Properties that do not qualify for conventional financing
- Bridging between transactions
What It Costs
Expect higher interest rates than bank loans, origination points, and fees, with interest accruing monthly. Terms commonly run six to eighteen months. The total cost can be substantial, which is why hard money is a tool for short holds, not long-term ownership.
The Risks
- High monthly interest that erodes the deal's profit
- Short terms that demand a timely exit
- Renewal fees if you cannot repay on schedule
- Foreclosure risk if the property value drops below the loan
A Note on This Guide
Terms, rates, and requirements vary by lender and borrower and change frequently. Nothing here is lending advice, and JC Pacific is a real estate brokerage, not a lender. Verify current programs with licensed lenders.
Frequently Asked Questions
Is hard money the same as a payday loan?
No, but the logic is similar: fast money secured against something of value, at high cost. Hard money is secured by real estate and used for short-term investment holds.
How much can I borrow with hard money?
Lenders typically advance a percentage of the property's value or after-repair value, leaving you to cover the rest. Advance rates vary by lender and deal.
Can I refinance out of a hard money loan?
Yes, that is the standard exit: refinance into a long-term loan after the rehab is done and the property is rented or stable. Plan the refinance terms before you enter the hard money loan.
Educational information
This guide provides general, educational information about California investment real estate. Any calculations, projections, or examples are estimates for educational and planning purposes only and do not constitute financial, tax, legal, lending, or investment advice. Market conditions, loan programs, rates, underwriting requirements, laws, and rules change over time, so verify current information with qualified professionals before making decisions. JC Pacific Corp is a real estate brokerage, not a lender, tax adviser, or law firm.
A note on financing: loan terms, interest rates, underwriting requirements, down payments, and program availability vary by lender and by borrower, and they change frequently. Nothing in this guide is an offer to lend. JC Pacific Corp is a real estate brokerage and is not a lender, mortgage broker, or loan originator. For your specific situation, obtain current quotes and program details from licensed mortgage professionals.
Run the numbers first. When you're ready to look at properties, JC Pacific can help with the next step.
Related investor resources
The California Investor hubMore in Financing
Put this guide to work
Turn research into a next step.
"The numbers first" applies to every property. Model the deal, research the address, compare markets, then talk with the JC Pacific team when you are ready to look at real properties and make an offer.