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Collateral on Hard Money Loans?

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I just received an enticing offer from a hard money lender with some of the best interest rates, points and ARV I’ve seen. Normally I would have jumped at the offer but they require collateral or liquid assets for a loan to be made.

 

As far as I understand hard money it is made against hard assets, or the equity in a property other wise its really not hard money. It’s understandable that a lender would require more funds incase a borrower defaulted on the loan and they had to sell the home to provide a profit. However every real estate investor I’ve talked to has advised me against using any of my current assets on any loan, no matter what.

 

Has anyone else on this forum successful received Hard Money rehab loans by giving collateral? If anyone has what exactly does the collateral mean? The lender doesn’t actually take the asset(s) and reimburse when the loan is repaid?

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Interesting, because as you have already said, hard money is usually just tied into the property it is lending on. And like others have said, I'd be very hesitant to put up personal assets as collateral on any investment property.

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Interesting, because as you have already said, hard money is usually just tied into the property it is lending on. And like others have said, I'd be very hesitant to put up personal assets as collateral on any investment property.

 

Thanks Michael,

 

I emailed the lender back and hopefuly I can get some more details. I will keep this thread updated.

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