In Part One of this blog we introduced 3 sources of funds for hard money loans: Private individuals, Local and Regional Mortgage Investment Funds, and Leveraged Lending Companies. This post will continue going through the different sources of hard money financing with Non-Leveraged Professional Lending Companies, Focused Hard Money Lending Professionals, National Hard Money Lenders, and Hedge Funds and Similar Alternative Investment Funds

The Non-Leveraged Professional Lending Company

There are far fewer of this type of company who offer professional alternative investment management and pool investor funds.  These companies take in funds from accredited investors, as limited partners, while the principals of the company (experienced in the hard money lending business) act as the general partner.  This type of company can also use leverage, but in many cases prefers to the lower risk non-leveraged business model. This type of company can be either local or national.

Focused Hard Money Lending Professionals

These lenders limit the area in which they lend and fund loans ranging in size from several hundreds of thousands to loans in the low millions. The limited partners share in the interest earned by the company and expect to receive an above average yield on their investment compared with substitute income investment funds, like diversified bond funds.   Full disclosure:  Montegra Capital and its principal, Robert Amter, (the author of this article) operate this type of company.

National Hard Money Lenders

Perhaps the most common source of funds for hard money loans, they operate nationwide (or in large regional areas) and typically funds loans starting at $500,000 up to several millions of dollars.  These national companies have a large staff and get their funds from a variety of sources including wealthy individuals and also lines of credit.

Hedge Fund and Similar Pooled Investment Vehicles

These have been entering the hard money funding arena in increasing numbers of the past few years. These hedge fund lenders – often capable of deploying multiple millions of dollars – recognize the basic conservative nature of hard money lending and are now aggressively attempting to dominate the market.  They can provide loans up to almost any size though typically they are not interested in loans below $5,000,000.

[google_authorship], because of his more than 40 years of experience in funding hard money loans, is considered an authority on hard money or bridge financing.  He frequently speaks at meetings and conferences and writes articles on these subjects.