In many cases, the only viable alternative to using a hard money lender is to bring in an equity partner and give away a percentage of the deal. One needs to ask the question however; "Is the expensive funding worth it in order to save giving away a piece of our real estate or company?" The answer is inevitably a very simple ROI analysis that shows that in the long run, if there is a large capital growth component to the project, the cost of the hard money loan is far less expensive than sharing the expected EBITDA growth over the next two to three years with partners. On the other hand, having lived through a downturn in the market over the past few years, sponsors have to be very certain that their business plans will play out as expected so that the sale or refinance events take place to replace the expensive hard money loans. Many developers had to turn over the keys to their hard money lenders because their market expectations did not play out as expected. Caveat emptor - buyer beware.

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Hard Money Lender List