How is private (hard money) lending different from a bank loan?

We are asset-based, which means we underwrite the property, its equity, and your business plan rather than your personal income and tax returns. That lets us fund in days instead of the 30 to 60+ days a bank takes, on short interest-only terms built around a flip, refinance, or sale. You pay a higher rate than a bank in exchange for speed, flexibility, and certainty on deals a bank cannot fund in time.

How fast can you close?

Fix and flip and residential bridge loans typically close in 5 to 7 days once we have your basics. Rental (DSCR) loans usually take 2 to 3 weeks because of the appraisal and rent verification, and SBA financing runs 30 to 90 days. The biggest variable is how quickly title, insurance, and your documents come together.

Do you check credit, and is there a minimum score?

We do run credit, but on our asset-based loans it carries far less weight than at a bank, and weaker credit can often be offset with a larger down payment or lower leverage. There is no personal income test on these programs. Credit matters most on long-term rental loans, where we look for a 640 minimum and it affects your rate and leverage.

Do I need to provide income documents or tax returns?

Generally no. Our bridge, fix and flip, and construction loans qualify off the property and your equity, and our DSCR rental loans qualify off the property's rent, so we do not ask for W-2s or pay stubs. We will want to see bank statements or proof of reserves. SBA and conventional investment loans are the exceptions and are fully documented.

What do you need to give me a quote?

Just the basics of the deal: the property address or type, the purchase price or current value, your rehab budget, the loan amount, and your exit plan. We can often pre-qualify you over the phone or through a short application and issue a proof-of-funds letter before you are even under contract.

What is a point, and how do your rates compare to a bank?

A point is an upfront fee equal to 1% of the loan amount, and origination on private loans typically runs 1 to 3 points. Our rates are higher than a bank, generally in the high single digits to low teens depending on the program, because the loans are short, fast, and flexible. When you compare offers, weigh the rate and the points together as your true cost of capital.

Direct private lending in most states

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Portfolio · 6 min read

Cross-Collateralization: Using One Property's Equity to Buy Another

The short answer

Pledging a property you already own to fund the next one. How cross-collateralization works, when it beats a cash-out refinance, and the risk you take on.

Cross-collateralization means one loan is secured by more than one property. You pledge equity you already have to support the acquisition you want to make, instead of bringing that equity as cash.

It is one of the most useful structures available to an investor with a portfolio, and one of the easiest to misuse.

What it does for you

Buy without liquidating. Equity in a stabilized rental funds the next deal without selling it or waiting on a cash-out refinance to close.
Move faster. On a competitive purchase, using existing equity as the down payment can be the difference between closing and losing it.
Get to a size that works. Two properties supporting one facility can clear a leverage or loan-size threshold neither reaches alone.
Let a strong asset carry a weaker one. Same logic as a blanket loan, where the pool is underwritten in aggregate.

The risk, stated plainly

You have connected two assets that were previously independent. A default on the combined facility puts both at risk, including the one that was performing perfectly well on its own. That is the trade, and it is not a small one.

Selling gets more complicated too. Releasing one property from a cross-collateralized loan usually requires a paydown and the lender's consent, on their terms, at the moment you want to transact.

Versus a cash-out refinance

A cash-out refinance pulls equity out as cash and leaves the properties separate. It is slower, it resets the loan on the property you refinance, and it may trigger seasoning requirements. But the assets stay independent.

Cross-collateralizing is faster and keeps your existing rate on the pledged property intact. Choose based on how much you value that independence, and how confident you are in the new deal.

Where it fits

A portfolio loan across 5 or more properties is cross-collateralization as a deliberate structure rather than a one-off. Portfolio loan vs individual mortgages lays out that choice, and how to scale a rental portfolio covers the strategy around it.

Short-term versions run through CRE bridge, up to 75% LTV.

Structures are set in underwriting. Business-purpose only, and not a commitment to lend.

Frequently asked

What does cross-collateralized mean?

What is the main risk?

Is it better than a cash-out refinance?

Rates, leverage, and timelines mentioned in this guide are typical figures, subject to underwriting and market conditions. Not a commitment to lend. Nothing here is legal, tax, or investment advice.

Related programs

Portfolio Loans CRE Bridge Rental / DSCR

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DSCR Loan vs Hard Money Loan DSCR Loan vs Conventional Loan

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