Hard Money Loans in California

If you need to close fast, buy a distressed property, or finance an investment property that banks won’t approve, a hard money loan can be the simplest solution. Hard money loans are asset-based loans backed by the property, designed for speed, flexibility, and real estate investors.

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Bank Statement Loan

Hard Money Loans: Fast, Flexible Real Estate Financing

When traditional lenders move too slowly or your scenario doesn’t fit “standard guidelines,” hard money can help you move forward without losing the deal.

Hard money loans are especially common in California because of:

  • competitive real estate markets

  • tight timelines to win offers

  • value-add investment opportunities

  • properties that need repairs before qualifying for conventional financing

Whether you’re buying, refinancing, or pulling cash out to fund your next project, hard money financing gives you a fast path to execution.

What Is a Hard Money Loan?

A hard money loan is a short-term real estate loan funded by a private lender (not a bank). Hard money loans are primarily approved based on:

  • property value

  • loan-to-value (LTV)

  • down payment/equity

  • your exit strategy

Hard money underwriting is more focused on the collateral than the borrower’s income documentation, making it a popular option for real estate investors.

Hard money loan = asset-based real estate loan + fast closing + short term + flexible guidelines.

 

How Does a Hard Money Loan Work?

Hard money loans work differently than conventional mortgages.

Instead of asking “Do you qualify based on income and DTI?”, hard money lenders ask:

  • Is this property good collateral?

  • Does the borrower have enough equity/down payment?

  • Is the exit plan realistic?

Most hard money loans are structured as:

  • short-term financing (often 6 to 24 months)

  • interest-only payments in many cases

  • borrower refinances or sells the property as the exit

 

Common Reasons Borrowers Use Hard Money Loans

Hard money loans are widely used for:

Fix-and-Flip Loans

  • buy a distressed home

  • renovate

  • sell quickly

  • repay the loan from sale proceeds

Bridge Loans

  • fund a purchase while waiting for another property to sell

  • close quickly without financing delays

Distressed / Uninhabitable Properties

Banks often won’t lend if a property:

  • has major repairs needed

  • has missing appliances

  • has condition issues

    Hard money may still be available.

Cash-Out for Investors

Some borrowers use hard money to:

  • pull equity out of an investment property

  • fund renovations

  • pay off high-interest debt

  • purchase another property

Key Benefits of Hard Money Loans

Hard money loans are popular because they offer:

  • Fast closings, often in 5–10 business days
  • Flexible underwriting compared to conventional lenders
  • Asset-based approval focused on the property
  • Options for investment properties (SFR, condo, 2–4 unit, mixed-use depending on lender)
  • Potential financing for properties that don’t qualify for traditional mortgages
  • Interest-only payments to help manage holding costs
  • A path to refinance into longer-term financing after repairs or stabilization

You’re Closer to Qualifying Than You Think

Tell us a little about your income, and we will show you exactly what you can qualify for with a bank statement loan. No pressure and no hard credit check.

 

Karbon Financial is trusted by hundreds of clients across California, earning over 350 five-star reviews on Google, Zillow, Yelp, and LendingTree. Self-employed buyers and homeowners choose us for our clear communication, competitive rates, and a process that is simple and stress-free from start to finish.

Hard Money Loan Requirements in California

Hard money guidelines vary by lender, but typical approval factors include:

1) Down Payment or Equity

Many hard money lenders want to see:

  • 20% to 35% down (purchase loans), OR

  • enough equity in the property (refinance loans)

2) Loan-to-Value (LTV)

Hard money is driven by LTV.

Lenders commonly lend up to:

  • 60%–75% of value

  • or a % of ARV (After Repair Value) for rehab projects

3) Exit Strategy

This is critical.

Common exit strategies include:

  • sale after renovations

  • refinance into DSCR / conventional financing

  • refinance after tenant placement and stabilization

4) Property Type and Condition

Hard money lenders typically lend on:

  • single-family homes

  • condos/townhomes (case-by-case)

  • 2–4 unit properties

  • some commercial / mixed-use scenarios

5) Basic Borrower Qualification

Hard money isn’t “no questions asked.”

Expect:

identity verification

background on investor experience (if applicable)

proof of funds

bank statements for reserves (varies)

 

Hard Money Loan Rates and Fees

Hard money rates vary based on:

  • property type

  • LTV

  • loan size

  • borrower experience

  • credit profile (sometimes)

  • market conditions

Hard money loans typically include:

  • interest rate

  • points (origination)

  • lender fees + third-party closing costs

Because hard money is built for speed and flexibility, it typically costs more than conventional financing. For many investors, the benefit is winning the deal and executing fast.

 

Hard Money Loans in Southern California

California real estate moves fast. In competitive markets like Los Angeles County and Orange County, speed often matters as much as price.

Hard money loans can be used to:

  • strengthen your purchase position

  • close without financing delays

  • win “as-is” investment opportunities

  • act quickly when a property needs repairs

We help investors and borrowers throughout California. Recently closings include:

  • Long Beach

  • Seal Beach

  • Huntington Beach

  • Costa Mesa

  • Lakewood

  • Torrance

  • Garden Grove

  • and surrounding Southern California areas

Hard Money Loan FAQs

How quickly can a hard money loan close?

Many hard money loans close in 5–10 business days, depending on appraisal/valuation and documentation.

Do hard money lenders require tax returns or W2s?

Usually not. Hard money is primarily based on the property and equity/down payment, not traditional income underwriting.

What is ARV in a hard money loan?

ARV means After Repair Value. It’s the estimated value of the property after renovations, which some lenders use to structure rehab financing.

Are hard money loans only for real estate investors?

Mostly yes, but certain scenarios may qualify for non-investor use. Hard money is most common for investment properties.

What are points in hard money lending?

A “point” is a fee equal to 1% of the loan amount. Example: 2 points on a $400,000 loan = $8,000.

Can I use hard money for a rental property?

Yes. Many investors use hard money to acquire or renovate rental properties and then refinance into long-term financing (such as DSCR loans).

Do hard money lenders check credit?

Often yes, but credit is typically less important than in conventional lending. The main focus is the collateral and exit plan.

What happens if I need more time?

Some lenders offer extensions (for a fee). It’s important to have time buffers in your renovation and exit plan.

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