How to Purchase Rental Properties Using a Hard Money Loan With no Money Down

Hard money loans for real estate give you a solution to fund your business. Hard money loans for real estate can be used to buy rental properties, fix and flip, until long-term financing is acquired.

last updated Sunday, September 14, 2025
#Hard money loan for rentals #HARD MONEY LOANS

by John Burson

How to Purchase Rentals Using a Hard Money Refinance With no Money Down

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Hard money loans for real estate can be an excellent option for you, and you can use them to buy rental properties with no money down by using a traditional loan refinance.

What is Hard Money Loans?

This type of financing is often used to finance properties over a short period. Hard money loans for real estate lenders have different conditions compared to conventional loan lenders. A significant difference is the high interest rate. Hard money loans for real estate lenders typically charge interest rates of 12 to 16 percent and points for these loans. Points are calculated as a percentage of the hard money loan, and they can quickly accumulate if the lender charges 2, 3, or 4 points for a hard money loan for real estate.

Why Should You Consider Using a Hard Money Loan?

The main benefit of a hard money loan for real estate lenders is that they will provide the entire loan amount you need to complete your transaction. Most lenders base the total loan amount on the ARV (or repaired value). Some can loan you 65 to 70 percent of ARV. Remember that this isn't the purchase price, but the property's value after it has been fixed.

Where Can You Locate Hard Money Loans for Real Estate Lenders

There are several hard money lenders, but some only lend in specific states, while others lend nationwide. However, the best way to locate hard money loans for real estate lenders is by searching for one near you on your search engine.

Private Money on Investment Property vs. Hard Money

A private individual avails private funds. This financier isn't a mortgage company, bank, portfolio lender, or hard money lender for real estate, but rather a single individual. Most people will be willing to fund real estate projects because the interest rates on other secured investments are often low. Wealthy individuals continually seek high-yielding and secure assets, and real estate financing may be the best solution to generate substantial returns.

How to Buy a Rental Property With No Money Down by Using a Hard Money Loan

Hard money loans for real estate make it possible to purchase a rental property with little to no down payment. If you were to obtain finance for repairs, you could refinance your hard money loan without a seasoning period. Fannie guidelines don't allow cash-out refinancing without an interest period. However, due to the financed repairs, the property will have a higher loan than the purchase price. Obtaining a long-term loan will replace the hard money loan, and you won't have to wait a year, as is the case with a cash-out refinance.

How to Use a Conventional Bank to Finance Your Short-term Investment Property Loans

Several banks offer short-term loans to property investors. They are often challenging to locate, and you must have a good relationship with such banks. You can use a portfolio lender to refinance your short-term investment. Traditional banks also offer another type of loan, known as lines of credit. However, you will be obligated to give real estate collateral. If you have equity in a property, you can qualify for a line of credit.