Here are the basics of hard-money-loan investment from Little City Investments. Give us a call or shoot us an email if you have additional questions or need clarifications.

Who do you make hard money loans to?

We lend to residential and commercial real estate investors and developers whose projects meet our requirements. Typically these projects are short-term flips, rehabs or new construction. We utilize our real estate expertise to research each deal thoroughly and establish well-secured hard money loan investments.

Who are your lenders?

Hard money loan investors are private individuals seeking low-maintenance, short-term, secured investments. Many are looking for stock market alternatives and enjoy the ability to invest in real estate without the hassles associated with landlording or construction. Some are also active real estate investors that want to diversify their existing real estate portfolio with notes.

Do I have a say in what deals my money goes to?

Very much so. Our investors receive information on each hard money loan to determine if it’s a fit with their portfolio and investment goals. Investors have the opportunity to decline any loan that doesn’t meet their needs.

What is the typical return on investment that I can expect if I invest in a hard money loan?

Most of our lenders receive 10% interest paid monthly. Opportunities may come up that pay slightly more or less than 10%, but you will have the chance to evaluate each loan and determine if the return and associated risk are comfortable for you.

Is Little City Investments a fund?

When you get an opportunity to fund a loan, do you contact an investor or do you already have a pool of money that investors have supplied to make the loan from? Our investors review and approve loan opportunities as they come up, so holding investor funds isn’t typical.  Generally only one investor is involved in each loan; we don’t pool funds. Our investors are clear owners of a specific note, not members of an investment fund.

Do you or your investors have to have a license to make hard money loans? Is there a distinction between commercial and residential loans?

Hard money loans are considered commercial mortgage loans since they are made for investment purposes. Even if they are made on residential property, they are considered commercial loans in the eyes of the law, and commercial loans do not require a license. On occasion we may consider a homestead property for a loan, in which case we work with a licensed mortgage broker to process the application and provide the appropriate disclosures.

This sounds too good to be true. Why would anyone pay you these high rates?

The reasons are different for every loan, but you can read our case studies with detailed examples from Austin real estate investors who have made our hard money loans work for them.