Hard Money Loans for Short-Term Rentals in Michigan

Frequently Asked Questions

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

Hard money loans are short-term loans backed by the real estate being financed. Rather than relying on credit scores or tax documents, the lender evaluates the property’s current or after-repair value. Michigan investors use hard money to acquire, renovate, or refinance properties—often in situations where traditional lenders won’t approve the deal. Loan terms generally run 6 to 36 months, with interest-only payments and minimal documentation. The speed and flexibility of hard money lending make it ideal for time-sensitive projects and non-conforming properties.

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

Hard money is the right choice when conventional financing isn’t fast enough or when a property doesn’t meet a bank’s lending criteria. Michigan investors often use these loans for flips, bridge financing, or acquisitions through LLCs. They’re also useful for borrowers without recent tax returns or W-2 income. Because hard money is based on the deal’s potential and the asset itself, it allows for fast closings and creative investment strategies—especially when traditional underwriting becomes a roadblock.

What makes hard money different from other types of financing?

The key difference is in the underwriting process. Traditional lenders focus on income, credit, and long-term repayment ability. Hard money lenders focus on the property’s value and your exit strategy. In Michigan, this allows real estate investors to take action on deals that conventional lenders would delay or reject. Hard money loans offer faster closings, fewer documentation requirements, and more flexibility. While interest rates are higher, the ability to close quickly can mean the difference between winning or losing a high-potential deal.

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

In Michigan, hard money loans typically offer terms from 6 to 36 months with interest-only payments. Purchase LTVs may go up to 85%, while refinances typically cap at 80%. Rates are higher than conventional loans but reflect the speed and accessibility of the funds. Origination fees and reserve requirements vary by lender and project. These loans are built for investors with short-term objectives like flips, rental repositioning, or time-sensitive purchases that can’t wait for traditional mortgage processing.

How quickly can a hard money lender close a deal?

Michigan hard money lenders can typically close in 3 to 10 business days. That quick turnaround gives investors a crucial edge in competitive markets or when dealing with distressed sellers and auction properties. Because underwriting focuses on the property—not your personal financials—you avoid the delays common with bank loans. When time is of the essence, a hard money loan lets you move forward confidently and avoid losing profitable opportunities to slower, less prepared buyers.

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

Yes. Many Michigan real estate investors secure hard money loans even with low credit scores or no verifiable income. These loans are based on the property’s value and your investment plan, not your personal financial history. Michigan regulates lending through state usury laws and disclosure requirements, so it’s important to work with a licensed, transparent lender. As long as the deal makes sense and your exit strategy is clear, hard money can help fund projects traditional lenders won’t touch.

Explore hard money loans and other short-term rental loans in neighboring states like Ohio and Indiana to scale your investments beyond Michigan.