Unlike traditional loans, a lender approves a hard money loan based on the value of the property being purchased, and not based on your personal credit worthiness.

Real estate investors often use hard money loans when they need quick access to capital for property acquisitions, renovations, or time-sensitive opportunities. REIA Hard Money funds deals that traditional lenders cannot, and very quickly, especially when the borrower is pre-approved before going under contract.

The lender evaluates the value of the property, rather than the borrower’s creditworthiness. Loan terms are generally short (usually a six month term), and allow for financing where traditional loans fall short. The property itself serves as collateral for the loan. Repair funds can also be included in the loan amount, and are typically held in escrow and the borrower is reimbursed as work is completed on the property. This allows investors to keep their own funds available for their other business needs.

REIA Hard Money lends on 1-4 unit residential properties owned by an LLC in the Greater Milwaukee Area. We also lend exclusively to members of the Milwaukee REIA.

REIA Hard Money lends up to 70% of the property’s After Repair Value (ARV). For example, for a house worth $200,000 after repairs we will lend up to $140,000 for the purchase and repairs.

Interest rates for hard money loans are higher than traditional loans, currently ranging from 12% to 15%. The rates are influenced by factors such as the property's risk, the borrower's experience, and the overall market conditions.  Interest payments are generally required to be made monthly during the term of the loan.

Points are fees charged to the borrower for providing the loan. Each point equals one percent of the loan amount. For example, on a loan amount of $100,000, 1 point = 1% of the loan amount or $1,000. REIA Hard Money charges 3 points on Fix & Flip and Fix-to-Rent loans, and 2 points on Double Close Loans. Your points may be wrapped into your loan amount.

We work to keep our fees as low as possible to help ensure maximum profitability on your deals. Here are the possible fees you may be charged as a REIA Hard Money Customer:

• $1000 Account Setup Fee (waived when you get pre-approved before your deal is under contract)
• $500 Document Preparation Fee (applies to all loans)
• $500 Underwriting Fee (waived for Students in the Milwaukee REIA Mentoring Program)
• $500 Rehab Escrow Fee (waived for Students in the Milwaukee REIA Mentoring Program) *Rehab escrow fee applies only to loans that include repair funds.

That’s it - no hidden fees, and no surprises! You will also see your typical closing costs on your settlement, such as property tax prorations, title fees charged by your title company, and state transfer taxes. All loan types/fees associated with each loan type will be available under the Resources dropdown after you have been pre-approved by REIA Hard Money.

Hard money loans are known for their quick approval and funding process. In some cases, borrowers can receive REIA Hard Money funds in as little as a few days or a week, making them suitable for time-sensitive opportunities. On loans that are closing in less than 10 business days, we’re only limited by how quickly the title can be prepared.

While REIA Hard Money does not have any prepayment penalties, each loan does require a 2 month minimum interest fee. If the project takes longer than planned, there is an opportunity to extend the maturity date by paying a 1% extension fee for each additional month needed, with a limit of 3 extensions.

If a borrower fails to repay the loan, then REIA Hard Money may take possession of the property through foreclosure. Since the loan is secured by the property, the lender has the right to sell it to recover their investment.  Further, if the sale of the property does not cover the amount owed, the borrower is responsible for any deficiency. 

It’s crucial that you only fund deals that will be profitable for you. Since REIA Hard Money evaluates your loan based on the real estate, if your loan is not approved, chances are your deal may not be as good as you think it is. While you may be committed to paying your debts no matter what, REIA Hard Money is even more committed to not participating in a deal where you may not be successful. We’re looking for successful, long term customers, and we’ll pass on a loan if we think it's in our customer's best interest.