What are Different Ways to Make Money with a Hard Money Loan? 100% Proven

David Cohn
Jun 18, 2021
Hard Money Loans

To be a successful landlord means making money in your sleep. This is why many people are interested in real estate investing.

But is not easy to get started in this industry. Property investing requires a lot of capital—and if you don’t have a lot of money sitting in your savings account ready to be spent, you have to take out a loan.

There are many different types of loans for investment properties, from traditional bank mortgages to hard money.

And if you’re looking for almost instant access to funds and can’t wait for the often-tedious application and approval processes imposed by banks, it might make sense to approach private lenders for commercial hard money loans.

Getting a hard money loan to fund a commercial or residential real estate project is a great way to use other people’s money to grow your property portfolio.

It’s certainly possible to make some serious money using this type of financing. Here are some ideas on how to do that:

1. Commercial real estate (CRE) investing

Commercial properties are one of the most difficult real estate markets to get into. But investors who can succeed in this niche can build true wealth quite fast.

Commercial properties can be incredibly lucrative; they provide a reliable passive income and a stable cash flow because businesses generally make good tenants.

Using a hard money loan to buy a commercial property and upgrading it to sell for a profit in a few months is one of the sure-fire ways to make money in real estate.

2. Mobile park investments

The mobile home park subsector of the CRE industry can be highly profitable because there’s shallow competition in certain areas. If you have not considered investing in mobile parks and mobile homes, you might be leaving money on the table.

The demand is high (as evidenced by the rising sales of mobile homes), and it’s hard to find good parks.

This is why many seasoned commercial property investors use hard money loans to buy land and mobile units to build a lucrative source of passive income and secure their retirement.

3. Wholesaling

Property investors are looking for assets to rent or flip often work with wholesalers who specialize in moving undervalued properties.

If you become a wholesaler, you can use loans from hard money lenders Tampa, Commercial Hard Money lenders texas to purchase properties that you know will sell but don’t have buyers right now.

Having access to hard money loans will make it easier to snatch deals with great potential quickly. You always have fast capital available, so you never have to miss out on discounted assets.

4. House flipping

Many residential property investors—especially those with backgrounds in construction—start as house flippers—interested in this industry? You can use hard money for fix-and-flip deals that are particularly time-sensitive because approval is fast, and you can get your money in a few days.

You can also use hard cash to fund repairs and quickly sell the house for a profit. If you know how to make upgrades that add value and spot places in great locations, it’s possible to make a small fortune using hard money to flip houses.

5. Rental houses

It’s no secret that becoming a residential property landlord is a great way to build a monthly passive income without the stress and hard work of regularly finding new properties to flip.

Why not use a hard money loan to purchase and upgrade a solid rental property and get premium rent from it?

Aside from single-family homes and condos, you can also look into commercial multifamily properties with more than five units.

Many successful commercial real estate investors buy apartment buildings and use loans from hard money lenders phoenix, Commercial real estate loans chicago, hard money lenders in maryland to upgrade their amenities and make them more attractive to better tenants.

It’s amazing how far an air conditioning system—or even a new swimming pool—can go in improving a property’s income and overall profitability.

Making the right upgrades often means charging higher monthly rents, and hard money can help you get there.

6. Vacation rentals

The pandemic has slowed down the tourism and hospitality industry, but many experts say that this sector will come roaring back to life in a year or two when the dust has settled.

Adding vacation rentals to your property portfolio is worth considering. You can use a hard money loan to buy, upgrade, and refresh your property to help ensure a higher overall year-round income and fewer vacancies.

If you’re planning to use hard money to update your vacation rental, think luxury instead of necessity.

What features can you add to make your rental stand out from the crowd?

It might seem frivolous to add a hot tub, but it might just be the addition your property needs for a zero-vacancy summer.

There’s so much competition in this sector, and any feature that will help you separate your property from the pack is a good investment for securing your passive income.

7. Short term rentals

Are you interested in listing short-term rentals on platforms like AIRBNB? You’re not alone—many people are doing this because it’s one of the most accessible paths to becoming a real estate investor.

It’s essential to keep in mind that AIRBNB bookings tend to be highest in large cities and famous tourist destinations, so make sure that your property is well located.

You can use a hard money loan if you want to make upgrades—such as better security features—to make your property ready for vacationers.

8. Investing in foreclosures

A down economy often means a rise in foreclosures in the commercial and residential real estate market. Aggressive investors take advantage of this trend by purchasing foreclosed properties and flipping them for a profit.

Of course, buying foreclosures can be risky, so it’s essential to educate yourself before taking the plunge. Many property experts say that finding good for closures to buy is an art all by itself.

And if you’re willing to put in the work, you may be able to find highly undervalued commercial and residential properties that you can repair and quickly sell for a tidy profit.

You might even find properties that can become great rentals. Hard money loans are used to fill in funding gaps when buying foreclosures. This type of financing is also handy for rehabs.

The great thing about commercial hard money lenders is that they are property investors themselves—which means that they understand and see value in foreclosed properties, not like banks that are often quick to pass on this risky asset class.


It’s true that in real estate, you have to spend money to make money. But you don’t have to spend money from your pocket necessarily.

Hard money lenders are ready to fund all types of projects. Talk to a commercial real estate financing specialist if you’re interested in using this type of funding for your next CRE venture.