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Hard Money Loans Explained: Last Chance Funding Before Foreclosure

By February 16, 2026Real Estate Pros Show

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Show Summary

In this episode of the Real Estate Pros podcast, host Michelle Kesil interviews Ron Cunningham, a hard money lender with nearly a decade of experience in the field. Ron discusses the unique aspects of hard money lending, including the types of clients he serves, the flexibility of loan terms, and the common misconceptions surrounding hard money loans. He emphasizes the importance of understanding the loan process, the criteria for qualification, and the benefits of working with a lender who recognizes the complexities of individual financial situations. The conversation also touches on the growing trend of ADU financing and the supportive role of hard money lenders in the real estate market.

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    Investor Fuel Show Transcript:

    Ron Cunningham (00:00)
    we’re like, I call it last chance. We do like last chance funding before someone has to forcibly sell their home. They come to us for a second chance. And we usually do loans from 24 months to 36 months to give them a little cushion to get themselves back on track.

    Because we’re humans and we know errors happen over the years. It’s hard to keep a straight 750 FICA score and an income of 250,000 every year and file your taxes on time. And things come up, life happens, and we’re that lender that understands life happens.

    Michelle Kesil (02:06)
    Hey everybody, welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil, and today I’m joined by someone I’m looking forward to chat with, Ron Cunningham, who is a hard money lender helping those who are needing more support to get the right loans. So excited to have you here today, Ron.

    Ron Cunningham (02:28)
    Thank you. Thank you. Hello, everyone. And hello, Michelle. Thank you for having me.

    Michelle Kesil (02:33)
    Yeah, absolutely. So let’s dive in. First off, for those who are not familiar with you and your work, can you share what your main focus is?

    Ron Cunningham (02:43)
    Yeah, I come from the 25 years of regular conventional FHA loans. I’ve been in the hard money space just shy of 10 years now. I kind of transformed over to more difficult type loans after the pandemic. I had a lot of regular A and B barbers in the past, but after our shortfall in 2020, I was forced to kind of bend the rules a little bit, if you will, and get into a space where

    traditional financing wouldn’t quite cover the type of borrowers that I take on. So we assist with investors or individuals who are trying to refinance if they get in some type of trouble. I work with lot of small ⁓ business individuals and ⁓ sometimes their taxes might not be up to par or…

    some of their credit scores may be a little lower than what the systems like to see. And that’s kind of where we jump in. We fill the gap between like a B of A and a Chase type product. And we allow, you know,

    we’re like, I call it last chance. We do like last chance funding before someone has to forcibly sell their home. They come to us for a second chance. And we usually do loans from 24 months to 36 months to give them a little cushion to get themselves back on track.

    Michelle Kesil (04:10)
    Awesome. And which markets do you operate with? it nationwide or just in a specific region?

    Ron Cunningham (04:17)
    I work heavily in the Los Angeles market. We also have ⁓ a few other states that we work out of, which is Louisiana. I also work in Detroit, a little bit here and there in Houston and Dallas, Texas. So a few other states we work with as well, but California’s our main hub. We’re out of California. Most of our client base and lenders are here out of California, but due to me working with private money, we are nationwide.

    Michelle Kesil (04:47)
    Awesome. And so what are some of the main keys of your business that you believe help support people? Like what are some of those things that make the biggest difference for your clients?

    Ron Cunningham (05:04)
    I believe we do a lot of stated programs, a lot of equity-based loans. FICO score is usually not that big of a factor. We may run the credit just so we know who we’re working with, but we don’t base loan approval or disapproval based on bad credit. we bend a lot more than, a FHA or a VA-type loan or a government assistance loan. We are that one tier right underneath them.

    Because we’re humans and we know errors happen over the years. It’s hard to keep a straight 750 FICA score and an income of 250,000 every year and file your taxes on time. And things come up, life happens, and we’re that lender that understands life happens.

    Michelle Kesil (06:37)
    Yeah, is there anyone that wouldn’t qualify to receive support from you?

    Ron Cunningham (06:41)
    Not really, not really. I think one of our biggest rules have to be 18 and over, but our, again, is equity based. We go up to about 70 % aggressively, 70 % LTV, ⁓ and most of our clients are doing refinances. So we kinda care to the market of individuals who are already in a home and they wanna refinance, pull cash out, and or get the property ready for sale.

    and try to maximize their value by allowing them to have rehab funds. So sometimes people come to us and just say, you I need 30, 40, know, say 50,000 to do new paint, new yard work so the property would appraise for a little bit more. It’s gonna have to sell at the bottom level. So we also help those two that are looking to sell or invest into the property or do ADUs. ⁓

    So the funds are available. We’re here to give them out. You just have to be able to afford the loan. The rates are a little higher. We’re usually between 9.9 % and 12%, depending whether we’re first or second position. So that matters in regards to rates. like I said, credit score is out the window. Taxes are out the window. Income’s out the window. If the property has 35 % equity,

    And like I said, we go up to about 70%. If we can figure a way to make those numbers work, you got an approved loan on your hands.

    Michelle Kesil (08:09)
    Awesome. And so what type of loans do, like, are you working with investors as well? And like, what type of loans would you recommend to them?

    Ron Cunningham (08:22)
    Yeah, a lot of our investors are investor-filled or pools of individuals. But yeah, we work with private money, hard money. It’s funny. It’s a different type of real reserve, real relaxed set of individuals who we work with. It’s not like a corporate bank with a whole bunch of rules. A lot of our deals are case by case. But we understand life happens. And we can put a decent explanation and letter together.

    on why this happened, why a person got behind. Say you might lose your job or might get injured on the job and you’re down for six months. You loans we can document it and make it make sense. You know, those are the type of loans we take home. We’re not just so stuck in a box where you’re out because something happened to you a year ago or half a year ago. We allow excuses.

    Michelle Kesil (09:10)
    Awesome. So what are you most focusing on solving or scaling to next in your business?

    Ron Cunningham (09:19)
    I’m going to go ahead and move over into the ADU space. I work again out of the area of Los Angeles, ⁓ Inglewood. There’s a lot of building going on in the areas that my office is near. So we’re kind of, and we do investment construction loans. So we’re kind of now starting to go more towards ⁓ build out scenarios. We’ll go even up to 90 % purchase. As long as you have 10 % down.

    and then also give you rehab funds. But they do want experienced borrowers for those type of programs. That gets a little more strict because permits are involved, buildings involved, and our timelines are short. They’re like 24 miles. But we will allow you to do ADUs, which is real popular now too.

    Michelle Kesil (10:41)
    What are some misconceptions that you have to bust for your clients when it comes to loans?

    Ron Cunningham (10:49)
    One of our biggest misconceptions is that we’re robbers and thieves and ⁓ sharks. They call us loan sharks a lot of the time. You’re not forced to take the loan. It’s just an option before selling the house at minimum value because the house is either ⁓ in disarray or you’re in foreclosure and you must sell within, say, 90 days. Wear that in between before you’re forced to do something you may not want to do. ⁓

    Yeah, a lot of the misconceptions are that we want your home. We want to come after you after you become a client. And that’s furthest from the truth. We’re just that last chance. If you need one more set of funds to do something with before you throw in the towel and there’s no more real estate to attach yourself to, we’re the company you come talk to first.

    Michelle Kesil (11:37)
    Awesome. What are the most common ways that you’re offering support? Is it just through like the credit or what other ways does it is an option?

    Ron Cunningham (11:55)
    we also do regular loans. A lot of times a client will come and we’ll start with the FHA or the VA or a regular 10.03 or a regular application to see if they qualify for some of the more normal companies like Rocket Mortgage or UWM ⁓ or another. We start there. We start there. But I find after the pandemic, a lot of my clients just don’t fit the box. ⁓

    due to debt income ratio or credit scores. So, you again, it’s just an option to go this route, but we don’t start with hard money. We do start with regular, give me all your credentials, give me your bank statements, give me your W-2s, give me your file taxes, and let’s just see how you follow up once we put all the data in. But if that seems to be off, then we have this last parachute type. I call it parachute loan.

    before you have to just jump out and give up all your assets. Some of these houses too are given to kids. We’re getting into the era now where unfortunately our grandparents are passing on and now parents are starting to feel that same area of life where…

    Children are now coming into property and a lot of times they haven’t been on the property long enough They don’t they you know a lot of traditional loans a lot of times want seasoning if you’re doing a refi meaning that you’ve been on the title over 24 months And we have a lot of red tape that we just slice through Due to letters of explanation if it makes sense so

    It’s just a whole different atom than your traditional going down to B of A or Wells Fargo or Chase Bank and pleading to them what you’re trying to do. If there’s been any type of ⁓ stormy waters in your past, most of those lenders won’t look twice at you and we welcome them.

    Michelle Kesil (14:34)
    Yeah, absolutely. And so what are kind of the steps that it takes to work with you or to get those loans secured?

    Ron Cunningham (14:46)
    It starts with a conversation. Obviously, my company is called RealQuest Realty. It starts with a phone call. We get an application. We do ask for regular 10-03. We have a simple format of taking down information, the address, making sure that our title is clear outside of the loan you may own. And we do a lot of free and clear property too, by the

    there’s free and clear property and you know, child or a grandparent, a grandchild or a child might inherit a piece of property and not have any interest in it.

    or on it and those loans are a little harder to get through the traditional way. So we’ll also accept the fact that a person just took possession of a piece of property without history. As long as we can show they have ownership, they have a piece of ownership of the property, we’ll throw out seasoning, know, we won’t hold them with that.

    Now we do, non-owner occupied loans are one of the other things too. A lot of times our clients use these monies for investment properties. So that’s important to know too. ⁓ But yeah, we do non-owner occupied properties without seasoning being involved nor FICO scores being involved. So that’s a big deal when you’re going through the loan process. Those two things are major factors to be able to hurdle over.

    Michelle Kesil (16:12)
    Yeah, and so what makes someone qualified for the loan?

    Ron Cunningham (16:15)
    Well, they have to have vested interest. They have to have a plan. They have to have income and be able to afford the loan that we’re going to give them. And they have to understand that these proceeds are usually to rehab or upgrade the home itself. We do somewhat debt consolidation, but we prefer to go back into the property. We can show those four or five things. Money’s for the house. The money’s temporary. The money’s for non-owner occupancy.

    ⁓ Those are about the five things that we asked for. And obviously for them to be 18 years old.

    Man, we’re really, really, basically you just have to have a heartbeat and a will. You know, will to live and a will to do what you say you’re gonna do. Well, that’s pretty much it. We’re really easy going. Go up to about a half a million dollars. Our minimum is 50,000. I mean, ⁓ we’re real cut and dry. I’m trying to think of the verbiage to say.

    Michelle Kesil (16:52)
    Okay.

    Okay.

    Ron Cunningham (17:18)
    to tell you how easy it is. It’s really, really easy. Matter of it’s so easy, it’s hard for me to go back to the regular loan community, because usually you get conditions about this long with FHA and VA, and our conditions are usually about like this. And we usually fund within two weeks. We’re really fast. So another thing is speed.

    Michelle Kesil (17:40)
    Is there anything people need to kind of know or have foresight on? Or does it kind of like sound? Because it sounds so easy. Is there anything that would maybe catch someone or, you know, someone might not fully understand and then find out later?

    Ron Cunningham (18:00)
    Okay, what they do need to know is that the loans are very short term, 24 to 36 months, two to three years. The interest rates are usually double what the rates are in the normal market. That is one of the drawbacks. We take big risks because we don’t ask for a lot of information and a of our loans are stated. So they make it up in interest rates and points. Points are usually a little higher in the hard money space than they are regular loans.

    our average points are between six to 10%, depending on the difficulty of the deal. So those are some misconceptions. The rates, the terms, the time limit. We usually don’t do 30 year loans, and most of our loans are interest only, meaning if we borrow $100,000 today, in two years, you’re gonna owe that same $100,000, along with the fees and wherever else that took place. We normally don’t do principal and interest loans. They’re really band-aid loans.

    So those are some things that definitely need to be spoke of before someone enters into a hard money situation.

    Michelle Kesil (19:01)
    Yeah, absolutely. That makes sense to understand all of the criteria.

    Ron Cunningham (19:06)
    Yeah. But the house, if the equity is there, it’s a livable property, and we as a team can all plan and see, hey, this is what $50,000 would do to this house. You had a kitchen, you take care of the lawn, you clean it out, the house would immediately be upgraded another 100, 100 and a half. This would benefit us as investors and it benefit the client as well. So normally it’s a win-win situation.

    Michelle Kesil (19:31)
    Yeah, absolutely. I’m sure it’s super supportive.

    Ron Cunningham (19:32)
    They just.

    Yeah, they just like to see that there’s a plan in place. If we have a plan and we can sketch out, hey, we’re to do an ADU, we’re going to add a bathroom, we’re going to add a new kitchen, we’re going to do whatever it might be to enhance the property and bring more value, then that’s a green light. That’s what we’re looking for. We want the money to go towards the house to upgrade it and give it more value.

    Michelle Kesil (19:56)
    Absolutely. Well, before we begin to wrap up here, if someone wants to reach out, connect, learn more, where can people find you and connect with you?

    Ron Cunningham (20:07)
    You know, real easy going. Again, my company’s name is RealQuest Realty Corp. We’re located out of Beverly Hills. My personal email address is rcstone2020 at yahoo.com. Again, it’s rcstone2020 at yahoo.com. And they can call me direct. I’m at 323-855-7071. So either email me.

    call me, text me, we’re real easy. We’re a small company, it’s about 10 of us. And we have a small organization of people who will get right back to you. If you don’t speak to me personally, one of my assistants will be on standby. And we’re usually in touch with the customer within 24 hours.

    Michelle Kesil (20:52)
    Perfect. Appreciate your time and your story. Thank you so much for being here.

    Ron Cunningham (20:57)
    Thank you, thank you so much. I look forward to talking to you. So if you ever have any other spaces where you need to fill, give me a call. I’d be more than happy to get on and be nice to see what questions the public has so we can answer the detailed questions that might come from individuals who are not in the business. But anything comes up, feel free to reach back. I’m here. I’m here to serve the community and would love to help you.

    Michelle Kesil (21:24)
    Thank you. And for the listeners tuning in, if you got value, make sure you have subscribed. We have more conversations with operators like Ron who are building real businesses and we’ll see you on our next episode.

    Ron Cunningham (21:26)
    Thank you.

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