How Do Hard Money Loans Work for Houston Investment Properties?

Hard money loans are a tool, not a long-term solution. Houston investors use them for speed and flexibility on value-add deals.

• Speed: Close in 7–14 days vs. 30–45 for conventional. Critical for competitive Houston deals.
• Terms: 12–24 month terms, 10%–14% interest rates, 2–4 points at closing.
• LTV: 65%–75% of ARV (After Repair Value). You'll need 10%–30% of purchase price as down payment.
• Qualification: Based on the deal, not your income. Credit score matters less than the property's numbers.
• Exit strategy: Refinance into a conventional or DSCR loan (BRRRR) or sell the property after renovation.

Bottom Line

Hard money makes sense for Houston BRRRR or flip projects where speed matters and you have a clear exit plan. The high costs are acceptable when you're creating significant equity through renovation.