Hard Money Loans

Hard money loans in Florida fund on the property rather than your income, and they close in days. You pay heavily for that speed.

Key features of hard money loans in Florida

• Closing in 7 to 14 days, faster than anything else available
• Underwritten on property value, often the after-repair value, rather than your income
• Minimal documentation
• Loan-to-value typically 65% to 75%
• Interest rates commonly 12% to 18%
• Origination of one to three points
• Terms of 6 to 24 months
• Interest-only payments

Price the whole cost, not the rate

The rate is only part of what this costs, and running the arithmetic before you commit changes how the deal looks.

Take $300,000 borrowed at 14% with two points, held for nine months. Interest at roughly $3,500 a month comes to about $31,500. The points add $6,000 at closing. Together that is around $37,500, before any legal, title or inspection costs, and before you have spent a dollar on the renovation itself.

Therefore your margin has to absorb close to $40,000 before the project earns anything. On a flip projected to profit $60,000, the financing consumes most of it, which is exactly why experienced investors treat hold time as the number to manage. Every extra month of delay costs another $3,500 here.

The exit is the loan

Hard money is a bridge to somewhere, and lenders will ask where. Selling the finished property is one route. Refinancing into permanent financing, usually a DSCR loan if you intend to rent it, is the other.

Line the exit up before you draw the money, not afterwards. A DSCR lender will want the property rented or rent-ready and will apply seasoning rules, so find out those requirements at the start. Because the hard money term ends whether or not you are ready, an investor without a working exit is refinancing under pressure at the worst possible moment.

Who this suits

• Fix and flip investors who need to move faster than conventional lending allows
• Buyers at auction, where funds must be available almost immediately
• Developers taking on distressed property that no ordinary lender will touch
• Investors buying hurricane-damaged property, which often cannot be insured or financed conventionally until repaired

That final case is genuinely common in Florida. A house an insurer will not cover cannot be financed normally, so hard money buys it, the repairs make it insurable, and permanent financing then becomes available.

Figures above are illustrative. Hard money terms, points and loan-to-value limits are set by each lender and vary widely. Confirm current terms and the full cost before you commit to a project.