Frequently Asked Questions (FAQs)

At MGM Capital Investments, we understand that securing funding for your real estate investment projects is a big step. Below are answers to the most common questions we receive from investors about hard money loans.

General Questions

What is a hard money loan?

Hard money loans are short-term loans secured by real estate, primarily used for investment purposes like fix-and-flip projects, bridge financing, or construction. These loans are asset-based, meaning approval focuses on the property’s value rather than the borrower’s credit history.

How is a hard money loan different from a traditional loan?

Unlike traditional loans, hard money loans:

  • Close faster (often within 7–14 days).

  • Have less stringent credit requirements.

  • Focus on the property’s value and the borrower’s exit strategy instead of income verification or credit score.

What types of properties are eligible?

Eligible properties typically include:

  • Single-family homes

  • Multifamily properties

  • Commercial buildings

  • Land for development
    Eligibility may vary depending on the loan program.

How quickly can I close?

We strive to close most hard money loans within 7-14 days, provided title clearance and document submission are complete.

Do I need good credit to qualify?

Not necessarily. Hard money loans focus more on the property’s value and the borrower’s strategy. While credit may be reviewed, it is not the primary factor for approval.

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Loan Terms and Costs

What is the typical loan-to-value (LTV)?

Our programs generally offer:

  • Up to 90% Loan-to-Cost (LTC) for fix-and-flip projects.

  • LTV up to 75% of the After Repair Value (ARV).

What are the interest rates?

Interest rates vary but typically range from 8% to 12%, depending on the loan type and borrower experience.

Are there prepayment penalties?

Some loans include prepayment penalties, while others do not. MGM Capital offers flexible options, including loans with no prepayment penalties.

What fees are involved?

Fees include origination fees, underwriting fees, and third-party costs like title or appraisal fees. MGM Capital is committed to transparent fee structures.

How are renovation funds disbursed?

Renovation funds are held in escrow and disbursed in phases as project milestones are completed. Borrowers submit documentation (e.g., photos, inspection reports) to request draws.

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Application Process

What documents do I need to apply?

You’ll need:

  • Purchase contract

  • Scope of Work (SOW) for renovations

  • Entity documents (if closing in an LLC)

  • Bank statements to verify liquidity

  • Property details (purchase price, ARV, etc.)

Can I use a hard money loan for a property I already own?

Yes. Hard money loans can be used for cash-out refinancing or to finance renovations on properties you already own.

Do I need an LLC to qualify?

While many borrowers close under an LLC, it is not always required. Some programs allow individual borrowers.

Can I qualify as a first-time investor?

Yes, first-time investors can qualify. Experienced investors, however, may benefit from more favorable terms.

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Repayment and Exit Strategies

What is the typical loan term?

Loan terms typically range from 6 to 24 months. Extensions may be available upon request.

What happens if I can’t repay on time?

We offer extension options for an additional fee. It’s important to discuss your exit strategy during the application process to plan accordingly.

What are common exit strategies?

Exit strategies often include:

  • Selling the property after renovations.

  • Refinancing into a long-term loan.

  • Using rental income to pay off the loan.

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Other Questions

Can I finance 100% of the project cost?

Hard money loans rarely cover 100% of a project. MGM Capital offers up to 90% of the purchase price and 100% of rehab costs, subject to ARV limits. In some cases, we can explore a 100% purchase and 100% rehab.

What happens if my project goes over budget?

Having contingency funds is crucial. If additional funding is needed, we may reassess your loan depending on the property value and project progress.

Do I need an appraisal?

Most of our loan programs do require a full appraisal to be ordered. Some options do not require a formal appraisal though.

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Still Have Questions?

Contact us at matt@mgmcapinvest.com or call (980) 500-9823 to speak with our team. We’re here to guide you through every step of the process.