The primary reason investors choose private hard money over cheaper conventional financing is speed. In a competitive market like California, the ability to close quickly can be the leverage needed to secure a distressed property at a discount. But exactly how fast is 'fast'?
The Standard Timeline
While conventional loans routinely take 30 to 45 days, a streamlined hard money loan can close in 7 to 14 days. In certain exceptional circumstances where the investor has an established relationship with the lender and the title is clean, closings can occur in as little as 3 to 5 days.
The speed is possible because private lenders bypass the bureaucratic underwriting of traditional banks, focusing on the asset rather than combing through years of personal financial history.
Common Delays to Avoid
The most common bottleneck in a hard money transaction is the appraisal. Lenders need a professional valuation to confirm the As-Is value and ARV. Delays in scheduling the appraiser can push the closing date back.
Title issues are another frequent culprit. Distressed properties often come with liens, unpermitted work, or clouded titles that must be resolved before the lender will issue funds. Working closely with a responsive title company from day one is essential.
A rapid closing requires preparation from the investor and efficiency from the lender. By understanding the bottlenecks, you can ensure your hard money loan funds on time.
Have your purchase contract, entity documents (LLC docs), scope of work, and proof of funds for the down payment ready immediately.
Sometimes. For highly experienced investors or very low LTV loans, some private lenders will rely on an internal valuation (BPO) instead of a full appraisal to expedite closing.
Fidelity Funding Corp · Direct California private money lender since 2006
450 N Brand Blvd, 6th Floor · Glendale, CA 91203 · Mon-Fri 8AM-6PM PT