Using Hard Money Loans for Your Rental Investments


By Will Heaton

Investing in real estate can be a lucrative avenue for building wealth, and it’s also an effective way to inject some diversity into your portfolio. While real estate investment trusts (REITs) and real estate crowdfunding allow you to invest passively, some investors prefer to own property directly. Income from a rental property is an additional way to reach your long term wealth goals. If you’re not comfortable parting with a substantial amount of cash up front to purchase real estate, a hard money loan may be the answer.

How Hard Money Loans Work

Hard money loans are short-term lending instruments that real estate investors can use to finance an investment project. This type of loan is often a tool for investors whose goal is to renovate a property, then sell it for a profit or hold it for cash flow. In the case of an investment bought as a rental property, an investor may hold onto it to earn steady income from rental payments.

The purpose of a hard money loan is to allow an investor to get a property ready as quickly as possible. As a result, these loans feature much shorter repayment terms than traditional mortgage loans. This is a good thing for investors who use a rental loan program. Intrust Funding has created a Rental Loan Program for investors that want to keep the property and earn steady cash flow.

Why do I need to get two loans?

Conventional financing requires substantial time for underwriting, appraisal, etc. Due to this lag, most buyers cannot compete against cash offers to win properties. You need a hard money loan to purchase the property and complete renovations. Once rehab is complete, you need a conventional loan to refinance and pay back your hard money loan. The quicker your property can be rehabbed, the quicker you can apply for refinance.

Usually, conventional mortgages won’t fund your rehab budget or use the After Repair Value (ARV) as the valuation. Intrust Funding will use the ARV as the valuation of the property and will not require an appraisal. We can close hard money loans within a week. Loans are paid off and you can sell or keep the property for cash flow. This gives you a better chance of winning properties and maximizes your cash on cash return for the investment.

What documentation will I need to get pre-approved?

Intrust Funding will only require a credit report and bank statement to evaluate and pre-approve you for a hard money loan.

How will I get my initial cash investment refunded?

You will put as little as 20% down on the purchase of the property through the hard money loan and complete the rehab. Generally, the new property value after the completed rehab is complete is higher than your purchase price. You will get a portion of your initial down payment back through the refinance based on the higher value of the property.

What are the rates and terms?

Intrust Funding Loans are priced at 2% – 4% loan fee, 12% interest rate, and 5 – 9 month loan terms. Hard money loans are a good fit for investors who need to get funding for an investment property quickly, without any of the red tape that goes along with bank financing. A streamlined rental loan process is the next step to finding your next investment opportunity.

Are you seeking a loan for an investment property? Contact Carolyn Gossett at or 425.999.5203 to inquire about our loan programs.

About the author…

Will Heaton is a co-founder and managing partner at Intrust Funding. As the fund manager, he is responsible for investor relations, underwriting, and new business development. Will has over 10 years of experience in multifamily and residential real estate. Drawing on his comprehensive knowledge of renovation financing and construction management, Will uses a value added approach to complete his multifamily and residential real estate projects. He regularly gives educational lectures to real estate investors and has been quoted on numerous occasions in well-respected publications. Will has been recognized by the Master Builders Association and Built Green for his work with LimeLite Development and Infinity Land Management. He is an enthusiastic member of the community and enjoys participating in various nonprofit groups throughout King County. In his free time, Will enjoys adventures with his wife and their two children, classic cars, and fishing.

REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at and be our guest for free!”

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