Hard Money Loans for Short-Term Rentals in Arizona

Frequently Asked Questions

What are hard money loans and how do they work for real estate investors?

Hard money loans are short-term, asset-based financing options used by real estate investors to acquire or refinance properties quickly. Unlike traditional loans, approval focuses on the value of the property instead of the borrower's credit score or income. These loans are often used for fix-and-flip projects, quick acquisitions, or properties that need repairs. Hard money financing typically includes short terms, interest-only payments, and higher rates in exchange for speed and flexibility. Because underwriting is minimal, investors can move fast—ideal for competitive or off-market deals.

When should an investor consider using a hard money loan instead of a conventional loan?

Investors should consider hard money loans when time is limited, traditional lenders won't approve the property, or documentation is a challenge. These loans are perfect for acquiring distressed properties, working under short timelines, or borrowing through an LLC. In Arizona’s competitive markets, hard money loans help buyers move faster than conventional mortgages allow. They're also useful when the property doesn’t meet standard lending criteria, such as needing repairs or having unique zoning. For speed and flexibility, hard money is often the better choice.

What makes hard money different from other types of financing?

The key difference with hard money financing is how it's underwritten. Traditional loans assess borrower finances in depth—credit, income, job history—while hard money loans focus on the deal and the property itself. This makes it easier for self-employed investors, flippers, and buyers working through LLCs to qualify. Approval timelines are faster, documentation is lighter, and terms are built for short-term strategies. Though interest rates are higher, the speed and access they offer can unlock deals conventional lenders would never approve.

What are the typical loan terms for a hard money loan?

Hard money loans usually carry terms of 6 to 36 months and are interest-only for the duration. Most lenders offer loan-to-value ratios of up to 85% for purchases and up to 80% for refinances. Interest rates are higher than bank loans but reflect the rapid access to capital. Arizona borrowers can often close in under two weeks. Terms may include origination fees, prepayment terms, or required reserves. These loans are built for active investors who need short-term funding for profitable real estate plays.

How quickly can a hard money lender close a deal?

Speed is where hard money loans shine. Arizona investors can often close a deal within 3 to 10 days, depending on title work and paperwork. That’s a fraction of the time needed for traditional mortgage funding. Because hard money lenders don’t require extensive documentation or income checks, the approval process is streamlined. This fast turnaround is ideal when bidding on foreclosures, auction properties, or any deal where timing gives you a competitive edge. Fast closings can mean the difference between securing or losing a great opportunity.

Can I get a hard money loan in Arizona with poor credit or no income documentation?

Yes. Arizona investors can qualify for hard money loans even with low credit scores or limited income proof. These loans are based on property value and deal structure, not personal finances. While Arizona has strict licensing requirements for lenders, business-purpose loans like these may be exempt from some consumer regulations. Usury laws still apply, so it's important to verify that interest rates are within state limits. Always work with a reputable, licensed lender to avoid predatory terms and ensure full compliance.

Explore hard money loans and other STR loans in neighboring states like California and New Mexico to expand your reach beyond Arizona.