Hard Money Loans for Short-Term Rentals in California

Frequently Asked Questions

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

Hard money loans are real estate-secured loans that prioritize the asset over the borrower’s financial profile. They’re often used by investors who need to close quickly or purchase properties that don’t qualify for conventional loans. These loans typically include short terms, higher interest rates, and interest-only payments. Because the underwriting process is minimal, borrowers can secure funds in days—not weeks. Whether it’s a fix-and-flip or a rental conversion, hard money loans offer the flexibility and speed that conventional financing can’t match.

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

Hard money loans are best used when speed, flexibility, or unique deal structures are involved. California investors often rely on them to win time-sensitive deals, buy distressed properties, or invest through LLCs. They’re also helpful when traditional lenders won’t approve a loan due to property condition or missing income documents. These loans allow borrowers to act fast, then refinance later with long-term financing. In a state like California, where competition is fierce, timing is everything—and hard money gives you an edge.

What makes hard money different from other types of financing?

Hard money loans differ from traditional financing by focusing on the property’s value instead of the borrower’s credit or income. This makes them ideal for real estate investors, especially those who are self-employed or structuring deals through entities. Approvals are quicker, paperwork is lighter, and loan terms are flexible. While the cost is higher, the ability to fund projects banks won’t touch makes hard money a valuable tool. For short-term investments or unconventional properties, it’s often the only financing that makes sense.

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

Hard money loan terms generally range from 6 months to 3 years, with interest-only payments during the life of the loan. Purchase loans may offer up to 85% LTV, while refinances are typically capped at 80%. California borrowers should expect higher rates than with traditional loans, but the process is much faster. Loan structures are built around the project timeline and exit strategy. Origination fees, closing costs, and reserves vary by lender but are often offset by the ability to act fast and capture ROI quickly.

How quickly can a hard money lender close a deal?

Hard money loans can close in just a few days—usually between 3 and 10—depending on title and documentation. This speed is a major advantage over traditional loans, which often take 30 to 45 days or longer. California real estate investors use hard money to stay competitive in fast-moving markets, win auctions, or satisfy quick close demands from sellers. By focusing on the property instead of personal income, these loans cut through the red tape and deliver fast funding when it’s needed most.

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

Yes. Hard money lenders in California regularly approve loans without strong credit or recent income records. These loans are asset-based, meaning the value of the property is what matters most. California has some of the strictest licensing requirements in the country, so it’s important to work with a lender who is fully licensed and operating legally. Interest rate caps (usury laws) may apply depending on the loan structure. Make sure your lender follows both state regulations and ethical lending practices.

Explore hard money loans and other Airbnb loans in neighboring states like Nevada and Arizona to diversify your holdings beyond California.