Hard Money Loans for Short-Term Rentals in Colorado

Frequently Asked Questions

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

Hard money loans are short-term, collateral-backed loans that prioritize property value over borrower qualifications. They're widely used by investors who need to close quickly or finance unconventional deals. Because these loans focus on the asset, borrowers skip much of the traditional documentation and get funded faster. Terms are typically short—6 to 36 months—with higher interest rates and interest-only payments. Whether you’re fixing and flipping or buying a short-term rental, hard money provides the speed and flexibility to act fast.

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

Real estate investors use hard money loans when a deal requires quick closing, or when traditional lenders can’t or won’t fund the project. They’re ideal for properties that need repairs, auction purchases, or deals structured through an LLC. Colorado’s competitive real estate landscape means timing matters—hard money loans let investors close in days instead of weeks. They're also helpful when credit or income documentation is an issue. When you need speed and flexibility, hard money is often the right tool.

What makes hard money different from other types of financing?

The main difference is that hard money loans focus on the asset—not your financial history. This approach allows for much faster approvals, minimal paperwork, and flexible terms. Unlike banks, which may require weeks of documentation and underwriting, hard money lenders look at the property’s value and your exit strategy. This is especially useful for Colorado investors who are self-employed or working on properties that don’t meet traditional lending criteria. You pay more in interest, but gain speed and accessibility.

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

Typical hard money loans come with terms of 6 to 36 months and interest-only payments. Loan-to-value ratios can reach up to 85% for purchases and 80% for refinances. Colorado investors should expect higher rates than traditional loans, but in exchange, gain speed and flexibility. Loan structures may include origination fees or reserve requirements depending on the lender. These terms are ideal for investors planning to renovate, flip, or refinance within a relatively short timeframe.

How quickly can a hard money lender close a deal?

Hard money loans can close much faster than conventional loans—often in just 3 to 10 days. That makes them especially valuable for Colorado deals where speed is essential, like distressed sales or competitive listings. Because they don’t require income verification or full documentation, the approval process is streamlined. Real estate investors can act quickly without getting bogged down in paperwork, allowing them to secure opportunities that others miss. Fast closings are a major advantage in Colorado’s fast-moving markets.

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

Yes. Colorado borrowers can qualify for hard money loans even with poor credit or limited income proof. Since these loans are based on property value, the lender’s focus is on the deal and your exit plan. Colorado requires hard money lenders to hold proper licensing if issuing business-purpose loans, and usury limits apply unless exemptions are met. Always confirm your lender operates legally in the state and is transparent with loan terms. This ensures a compliant and trustworthy lending experience.

Explore hard money loans and other STR loans in neighboring states like Utah and New Mexico to scale your portfolio beyond Colorado.