Hard Money Loans for Short-Term Rentals in Minnesota

Frequently Asked Questions

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

Hard money loans are short-term loans designed for real estate investors who need fast access to funding. In Minnesota, these loans are commonly used to purchase, renovate, or refinance properties that may not qualify for traditional financing. Hard money lenders base the loan on the property's current or projected value—not your credit score or tax returns. Loan terms typically span 6 to 36 months and feature interest-only payments. These loans are especially valuable for investors who need to close quickly and execute short-term strategies with confidence.

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

Hard money loans are best used when speed is critical or when a deal doesn't meet traditional mortgage guidelines. Minnesota investors rely on them for quick closings, distressed properties, or purchases made through LLCs. They're also ideal for borrowers without W-2 income or recent tax returns. Since approval is based on the property and investment plan—not personal financials—these loans provide a direct path to capital when timing or project complexity rules out conventional lending.

What makes hard money different from other types of financing?

Hard money loans are different because they focus on the real estate deal rather than the borrower’s background. Traditional lenders require income verification, strong credit, and a slow underwriting process. Hard money lenders evaluate the asset and exit strategy, allowing for fast closings and greater flexibility. For Minnesota investors, this means more opportunities to move quickly on flips, auctions, or rental conversions. While interest rates are higher, the tradeoff is access to fast capital without red tape—something many investors value more than lower rates.

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

Minnesota hard money loans typically range from 6 to 36 months and come with interest-only payments. Loan-to-value ratios generally reach up to 85% for purchases and 80% for refinances. The higher interest rates reflect the flexibility and speed of the process. Lenders may also charge origination fees and require reserves depending on the deal. These loans are structured for short-term goals like fix-and-flips or bridge financing and are built to close fast—usually within 3 to 10 business days.

How quickly can a hard money lender close a deal?

Hard money loans in Minnesota can often close in as little as 3 to 10 days. That speed is essential when competing for properties or acting on urgent opportunities. Because the underwriting is based on the property—not your credit score or tax returns—the process avoids the common delays of conventional loans. Whether you’re bidding on a foreclosure or trying to close quickly on a rental investment, hard money gives you the ability to act before the competition.

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

Yes. Many Minnesota investors qualify for hard money loans without strong credit or full income documentation. These asset-based loans are evaluated on property value and deal strength, not borrower financials. Minnesota does regulate interest rates and lending activity, so it’s important to work with a lender who is compliant with the state’s legal requirements. Transparency and licensing matter—choose a lender that provides clear terms, operates legally, and supports your long-term investment goals.

Explore hard money loans and other Airbnb loans in neighboring states like Wisconsin and Iowa to expand your reach beyond Minnesota.