How Does a Hard Money Lender Value My Property?

How Does a Hard Money Lender Value My Property?

When making a loan, a bank and a hard money lender both have different opinions when it comes to determining the value of the property. A hard money lender takes a very conservative approach to property value. For example, the appraised value means nothing to the hard money lender. Instead, a hard money lender will determine the value of the property as if they had to sell it in 30 to 90 days. This is sometimes called a “fire sale” value. If a borrower defaults on a hard money loan, hard money lenders will be able to sell the property quickly at the “fire sale value” to recover their investment. For this reason, a hard money loan is usually in the range of 60-80% of the purchase price. For example, if you are buying a property for $100,000, a hard money lender will give you between $60,000 to $80,000 max of the purchase price.


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About the author

Corey Curwick Dutton, MBA Park City, Utah - 2005 MBA Graduate with 10 years experience in Business Management including International Management. Corey is a Private Money Lender and Loan Officer. In her spare time Corey enjoys writing on topics in the private money lending industry. She also enjoys hobbies such as mountain biking and skiing in the great outdoors of Utah.