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Private Hard Money Lending — Frequently Asked Questions
Clear, direct underwriting and process answers for real estate investors. Have a property-specific question? Submit your scenario below for a review by a Loan Daddy loan specialist.
What are the typical terms for Private Hard Money Lending?
Private and hard money investor loans are asset-based business-purpose loans underwritten primarily on property value, equity, and exit strategy (or rental cash flow for long-term rental programs). Timing depends on appraisal and title readiness, and program guidelines vary by lender.
Do private money and bridge loans require tax returns or W-2s?
Many business-purpose investor bridge and DSCR rental programs focus on the property: its value, its rental income, liquidity reserves, and borrower track record, subject to lender guidelines.
How do lenders calculate Loan-to-Cost (LTC) vs. Loan-to-ARV (LTARV)?
Loan-to-Cost (LTC) measures the total loan against purchase price plus documented renovation budget, while Loan-to-ARV (LTARV) caps total leverage against the appraiser’s estimated After-Repair Value. Wholesale bridge lenders evaluate both ratios together.
How do renovation holdback draws work on fix-and-flip bridge loans?
Rehab funds are held in construction escrow at closing and released in milestone draws after third-party inspection confirms completed work against your approved scope of work.
Can I close in an LLC or business entity?
Yes. Business-purpose real estate investor loans are commonly closed in LLCs, corporations, or limited partnerships, subject to lender underwriting guidelines.
How do I transition from a short-term private money bridge loan into a 30-year DSCR rental loan?
Investors who decide to hold a renovated property as a rental commonly refinance out of their short-term bridge note into a 30-year fixed DSCR loan once renovations are complete and market rent is verified via Form 1007 or an executed lease.
Are primary residences eligible for private or hard money loans on this site?
No. Loan Daddy LLC (NMLS #2827624) arranges business-purpose loans on non-owner-occupied investment real estate only.
Why work with a mortgage broker instead of a single lender?
Loan Daddy LLC (NMLS #2827624) is a mortgage broker, not a lender. We compare multiple wholesale private money, bridge, and DSCR capital sources so you can review competing program options side by side.
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