Knowing how to compare hard money loan offers comes down to accepting that rate is not the first number you look at. It is roughly the fourth. Equity comes first, then certainty of close, then proceeds, then price — and on the same loan request you can see a 2% spread on rate and five points of difference in fees, so the cheap quote and the fundable quote are frequently two different pieces of paper.
Moshon Reuveni has been brokering private loans for more than 30 years and now runs Lendersa, a marketplace that broadcasts a single loan request to 100 to 200 matching private lenders and collects their quotes side by side. That gives him something most borrowers never see: what a specific request draws in the open market at a given LTV, credit profile, and asset type.
Below are the LTV bands where credit and experience start to matter, the sequence for pushing each lender on the term they can actually move, what commercial and land requests really price at, and how to tell a funded lender from a broker still hunting for an investor.
Key takeaways
- Private money is priced in a wide band — the same request can draw a 9% two-point quote and an 11% six-point quote, and the expensive one often wins because it closes in a week instead of three.
- Below roughly 50% LTV, lenders stop caring about your FICO. Above 60% LTV, credit and experience become the deciding factors, and a 90% LTV request draws no replies at all without strong credit.
- Decide before you negotiate whether you are optimizing for timeline, proceeds, or cost — then push the cheap-but-small lender on proceeds and the large-but-expensive lender on rate, not both on everything.
- Land LTVs vary enormously by entitlement status: roughly 20-25% for remote rural acreage, generally under 50% as a default, and 60-70% for an entitled infill lot with utilities and city approval.
- Expect about five replies within 30 minutes to five hours, and treat the offer flow as closed after two days. Then verify whether the winning quote came from a direct lender or a broker still sourcing an investor.
From the Real Estate Pros Show
This article draws on an interview with Moshon Reuveni of Lendersa Inc on the Real Estate Pros Show, hosted by Dylan Silver.
How to Compare Hard Money Loan Offers Without Fixating on Rate
Start from the assumption that the cheapest quote on your desk may not be a real quote. Conventional debt trades in a narrow band — Reuveni’s rule of thumb is a quarter point of spread between banks, maybe half a point if you shop aggressively. Private money does not work that way. On a single loan request he routinely sees a 2% spread on rate and up to five points of difference in fees. One lender quotes two points. Another quotes six. Both are looking at the same property.
The failure mode is predictable. You take a 9% quote, 24 months, two points, and start clearing conditions. Two or three days in, that lender asks for bank statements you don’t have or a credit profile you can’t produce. You move to the next offer at 11% and that one closes. The 9% quote cost you nothing in interest and three days in escrow — which, on a deal with a hard closing date, is the expensive part.
The same logic explains why the six-point lender wins deals outright. If they can fund in a week and the two-point lender needs three, and your seller will not extend, the six-point offer is the only offer. Reuveni is direct about this: lenders on his platform win business regularly on speed rather than price.
So rank offers in this order — is the equity position one a lender can live with, will this party actually close, does it give me enough money, and only then what does it cost.
Equity First: The 60% LTV Line Where Credit Stops Mattering
In hard money, equity is the underwriting. Reuveni’s framing is blunt: as long as there is enough equity, nobody cares whether your FICO is 500. At 40% to 50% LTV, credit essentially drops out of the decision. You will get quotes regardless of your score.
Above 60% LTV, that flips. Credit and experience become the deciding factors, because the lender is no longer protected by the discount to value — they are betting on you performing, and they do not want the property, the litigation, or the cleanup. If your credit is weak and you are asking for more than 60%, expect a hard conversation.
The response data makes the bands concrete:
- 90% LTV request, weak credit: no replies. None. With strong credit, four or five.
- $1M-$2M in California at 60% LTV: around 15 replies, even with bad credit, provided the story holds up.
Treat DSCR lenders as a separate box, not as hard money. They run credit floors — some won’t look at you below 690, others draw the line at 620 — and they also screen on experience. Many also have geographic and minimum-loan-size filters: California only, Arizona only, or nothing under $1 million.
The practical move is to price your request into the band where you’ll get competition. If you’re at 70% LTV with a 580 and no track record, bringing a little more cash to close can be the difference between one grudging quote and ten.
You could get a difference of 2% on the rate, sometimes 5% on the points. One lender will offer you two points, another will offer you six. You’re going to end up taking the six points because it could close in a week and the other guy could close in three weeks.
— Moshon Reuveni, Lendersa
Ranking Your Own Priorities Before You Negotiate
Before you reply to anyone, write down which single term you are optimizing for. There are three real answers.
- Timeline. You must close in three weeks or the deal is gone. Rate and points are noise; certainty is everything.
- Proceeds. You need $500,000 to build. A $400,000 offer at 8% is useless to you no matter how good the pricing looks, because the project doesn’t finish.
- Cost. You have time and enough capital, so price is the variable.
That answer determines what you ask each lender for. The lender offering $400,000 at 8% gets asked whether they can stretch to $500,000. The lender offering $500,000 at 11% gets asked whether they can come down on rate. You do not ask both lenders for both things — you push each one on the axis where they are weak and you already know they have room.
How you ask matters as much as what you ask. Reuveni’s caution, after decades of doing this by phone and email, is to negotiate in a way that always leaves the door open. Never send the message that says “if you can’t do this, there’s no deal.” You may need that lender on Thursday when your first choice discovers a title issue. The tone that works is: I like your offer, I like the proceeds, can you help me on the rate.
Running three or four of these conversations in parallel is normal on a complicated file. Expect to go back and forth until one lender’s package actually lines up with your priority.
When Commercial Hard Money Beats a Bank Loan
A bank generally will not fund you without two to three years of tax returns. That single requirement is what pushes most commercial borrowers into private money, and it has nothing to do with the quality of the deal.
Reuveni’s examples of who gets stuck:
- Funded startups with no revenue history. Millions in the bank, orders in place, income starting later this year — and no tax returns. A bank won’t touch it.
- Developers on a clock. A borrower with a 50-lot subdivision he wants to develop cannot wait six months for bank approval. A private investor approves in three to four weeks and he starts building.
Run the math on that second one the way he does. The bank might have been 8%. Private money is 11% or 12%. But the loan is only outstanding six to twelve months before he refinances or sells, so the extra 300 to 400 basis points on a short-duration loan is small relative to a six-month delay on an entitled subdivision.
The other classic commercial use case is a property no bank will lend against in its current condition. One borrower bought an apartment REO from a bank at roughly 60 cents on the dollar with half the units uninhabitable. Banks passed on the acquisition entirely. A private lender funded the purchase and $6 million to $7 million of repairs, because the discount to stabilized value covered the risk.
One caveat worth stating: if you do qualify for a bank or SBA loan at conventional pricing, take it. Hard money is the tool for deals with no bank available, not a default.
Land and Construction Loans: Experience, Entitlements, and Real LTVs
Land LTVs are entitlement-driven, and the range is wide. Reuveni’s bands:
- Default assumption: under 50%.
- Remote rural acreage — 200 acres in the middle of nowhere with nothing on it: roughly 20% to 25%, and only from a lender who knows that specific area.
- Entitled infill lot with utilities in place and city approval: 60% to 70% with good credit.
You also don’t always need a construction plan. If you’ve secured approvals on a $400,000 lot where someone can build a $2 million house, and your exit is a sale rather than a build, lenders will still quote — because they can sell the lot in three or four months if you default.
Entitlement risk is what makes lenders skittish, not the dirt. Permitting has gotten slower and more adversarial in many jurisdictions, and no private lender wants to sit through a three-year approval process. His Malibu example is the cleanest illustration: a burned lot in a great location that looked like an obvious land play, until diligence turned up old geological issues that made a permit impossible. The lots immediately on both sides were buildable. Same street, same block, completely different loan.
On construction and fix-and-flip, experience prices the loan. Four completed projects in the past two years puts you in good standing — better leverage and better rate. No experience means a lower LTV, but not an automatic decline outside the DSCR channel. A private lender looking at a strong LTV and a project that pencils will fund a first-timer on the logic that worst case, they finish it themselves.
How Long to Wait for Quotes and How to Vet the Lender Who Wins
Give the market two days, then stop waiting. Requests go out instantly to every lender with a matching profile — sometimes 100 or 200 of them — but replies are manual. A person reads your description, decides whether it fits, and quotes. Typical pattern: about five replies land within 30 minutes to five hours. A few stragglers come in a day or two later. After roughly two days, no new offers arrive.
Because the reads are manual, what you write matters as much as your numbers. If you need to close in two weeks and a lender’s floor is three, they will not call you back. If you need $200,000 cash out and they don’t do cash out, same result. Put the constraints in the request so the wrong lenders self-select out.
Reuveni’s view on that silence is worth adopting: “My best investors are investors that tell me no right away.” A fast no lets you move on. A slow maybe from someone who hesitates, says they’ll do it, then doesn’t, is the thing that kills deals.
Once you’ve picked a winner, verify two things before you stop shopping:
- Are they lending their own money, or are they a broker still looking for an investor? Good brokers with real private-investor relationships are worth using — but you need to know which situation you’re in, because it changes your close timeline.
- Have they funded anything recently? A party who closed well two years ago but hasn’t funded in the last six months is a different risk than an active lender, regardless of the 8% they quoted you.
Frequently asked questions
At what loan-to-value does my credit score stop mattering to a hard money lender?
Around 50% LTV and below. At 40% to 50% LTV, private lenders are protected by equity and generally will not decline you on credit — a 500 FICO can still get funded if the equity is there. Above 60% LTV, credit and experience become the deciding factors, because the lender is now relying on you to perform rather than on the discount to value.
How many quotes should I expect on a hard money request, and how long should I wait?
Expect roughly five replies within 30 minutes to five hours, with a few more trickling in over the next day or two. After about two days, no new offers come. Volume tracks how lendable the request is: a $1M-$2M California request at 60% LTV can draw 15 replies even with weak credit, while a 90% LTV request with poor credit may get none at all.
Why would I pay six points instead of two on the same deal?
Because the six-point lender can close in a week and the two-point lender needs three. If you have a hard closing date and the seller won’t extend, the fast lender is the only lender, and the points are cheaper than losing the deal. Speed is also why the cheap quote sometimes evaporates — a 9% two-point offer that dies on a bank-statement or credit condition three days in has cost you time you can’t get back.
Can I get a hard money loan on raw land if I don’t plan to build?
Yes, though at lower leverage. If you’ve taken a lot through city approval and your exit is a sale rather than a build, lenders will still quote — around 60% with good credit — because they can liquidate the lot in a few months if you default. Remote rural acreage with no utilities or entitlements is a different animal, usually in the 20% to 25% LTV range and typically only from a lender who knows that submarket.
Do I need prior flips or builds to get a hard money construction loan?
Not necessarily, but it changes your terms. Four completed projects in the past two years gets you better leverage and a better rate; no track record means a lower LTV. DSCR-style lenders often screen out inexperienced borrowers outright, but private lenders will still fund a first project if the LTV is conservative and the numbers work, on the reasoning that they could finish the build themselves in a worst case.
Can I get quoted before I have a property under contract?
You can submit a request with just a market — Los Angeles, Dallas — and get some indication of pricing, but the responses won’t be conclusive. In private lending the specific property drives everything, and lenders are reluctant to spend time on a file with no address. Two adjacent lots can underwrite completely differently: one Malibu lot had geological conditions that made permitting impossible while the parcels on both sides were buildable.
The bottom line
The most useful thing you can do with a stack of quotes is rank your own constraint first — timeline, proceeds, or cost — because that single decision tells you which lender to push, on which term, and which offer to walk away from before you spend three days clearing conditions on a rate you were never going to get.
