Hard Money vs Conventional Loans

Investors constantly weigh hard money speed against conventional pricing. Neither is universally better — they serve different jobs. This guide breaks down when each product is the right tool.

Side-by-side comparison

The tradeoffs come down to time, documentation, and cost of capital.

• Rate: conventional 6–8%, hard money 9–13%
• Speed: conventional 30–45 days, hard money 7–14 days
• LTV: conventional 75–80%, hard money 75–90% + rehab
• Docs: conventional full-doc, hard money asset-only
• Term: conventional 15–30 years, hard money 6–24 months

When to use each

Use hard money for acquisition, rehab, and time-sensitive deals. Refinance into conventional (or DSCR) for long-term hold. Most scaling investors use both in sequence.

Frequently asked questions

Is hard money worth the higher rate?

For short-term projects (flips, BRRRRs), yes — the ability to close in a week and win competitive deals more than covers 4–6 months of higher interest.

Can I refinance hard money into conventional?

Yes, though most investors refi into DSCR (30-year, no-tax-return) rather than conventional because DSCR allows LLC vesting and unlimited properties.

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