What Every Investor Should Know Before Borrowing
Hard money loans can be a powerful tool for real estate investors—offering speed, flexibility, and funding options that traditional lenders simply can’t match. But not all investors use hard money the right way. Whether you’re new to the game or scaling your portfolio, knowing the do’s and don’ts of hard money lending can make or break your next deal.
Here’s our guide to getting it right:
✅ DO: Know Your Numbers
Before applying for a hard money loan, you need to have a solid grasp on your deal’s purchase price, rehab budget, ARV (after-repair value), and timeline. A reputable lender will walk you through the process—but you should already know whether the numbers work.
Pro Tip: Use tools like the 70% Rule to quickly assess deal viability. If you’re unsure, ask your lender—they should be a resource, not just a checkbook.
❌ DON’T: Max Out Your Leverage Without a Backup Plan
Hard money can fund a high percentage of your project—but borrowing the max without reserves can leave you vulnerable. If unexpected costs arise or your exit timeline changes, you don’t want to be caught empty-handed.
Borrow smart, not desperate. Investors who stay liquid stay in business.
✅ DO: Work with a Relationship-Based Lender
In markets like North Carolina, South Carolina, and Savannah, GA, local knowledge and personal relationships go a long way. A good lender should be more than just a source of funds—they should help you navigate the ups and downs of a project.
At Low Tide Private Lending, we pride ourselves on being a trusted partner to our borrowers—not just a lender.
❌ DON’T: Ignore the Fine Print
Every loan has terms, and they matter. Watch out for things like deferred interest (which sounds great but can cost more in the long run), prepayment penalties, or tricky draw processes that delay your rehab timeline.
Read every term. Ask every question. Your lender should be transparent and willing to explain everything in plain English.
✅ DO: Communicate Early and Often
Things change—timelines shift, repairs take longer, the market cools. Keeping your lender in the loop builds trust and gives them the opportunity to work with you, not against you.
The best borrowers are proactive. So are the best lenders.
❌ DON’T: Use Hard Money for the Wrong Deals
Hard money is ideal for short-term projects like fix-and-flips, value-add rentals, and BRRRRs. It’s not a fit for long-term holds or highly speculative deals.
Just because you can get a loan doesn’t mean you should. Use the right tool for the right project.
Final Thoughts:
Hard money lending can accelerate your real estate investing success—but only when used strategically. At Low Tide Private Lending, we specialize in helping investors across the Southeast fund smart, profitable projects. We close fast, fund both purchase and rehab, and offer a straightforward draw process that keeps your project moving.
Need funding for your next deal? Let’s talk.
📞 1-844-LOW-TIDE (844-569-8433)
🌊 Low Tide Private Lending