Investor Financing Guide · Texas
Hard Money Loans in Frisco
Hard money is asset-based, short-term financing: the lender underwrites the property and the deal, not your tax returns. For Frisco investors, its real product isn't money — it's speed and certainty. A credible hard money pre-approval lets you compete with cash buyers and close in days instead of months.
The Frisco market, for investors
Frisco has been one of America's fastest-growing premium suburbs — new construction, corporate campuses, and school-driven family demand.
New-build stock minimizes capex risk while compressing yield; build-to-rent and near-new SFR strategies dominate, usually DSCR-financed with equity-growth as the return driver.
What hard money is (and isn't)
A hard money loan is secured primarily by the real estate itself. Underwriting centers on the asset's value — usually both as-is and after-repair — and your exit plan, with credit and experience as secondary factors. Terms run 6 to 24 months, payments are interest-only, and the principal is repaid when you sell or refinance.
It is expensive money by design: rates typically run 9.5–12% with 1–3 points of origination. That math only works when the loan is doing something a bank can't — closing in a week, funding a property too distressed for conventional financing, or bridging you to a sale or refinance. Priced against losing the deal, it's often cheap; used as a substitute for long-term debt, it's a mistake.
The industry has professionalized: today's better hard money shops operate like specialty banks, with draw schedules, servicing, and repeat-borrower pricing. The old stigma mostly reflects the pre-2010 era.
What actually determines your terms
Three numbers drive everything: loan-to-cost (the share of purchase plus rehab the lender funds, commonly 80–90%), the loan's ratio to after-repair value (most lenders cap around 70–75% of ARV), and your track record — documented completed projects move both leverage and price meaningfully.
The binding constraint is usually the ARV cap, not the LTC. A lender offering 90% of cost will still cut the loan if that number exceeds ~70% of what the property will be worth finished. Run both tests before you write the offer.
Typical terms at a glance
| Typical rates (early 2026) | 9.5% – 12% interest-only |
|---|---|
| Origination | 1 – 3 points, plus underwriting/doc fees |
| Term | 6 – 24 months; extensions negotiable up front |
| Loan-to-cost | 80% – 90% of purchase + rehab for experienced borrowers |
| ARV cap | ~70% – 75% of after-repair value |
| Time to close | 5 – 14 days with title and valuation in hand |
Typical ranges as of early 2026 for experienced investors; first-timers should expect lower leverage and slightly higher pricing. Confirm live quotes.
Ready to price your deal?
Key Real Estate Capital funds hard money and bridge deals nationwide and can pair the short-term loan with the long-term refinance — one relationship from acquisition to stabilized debt.
Get a Frisco quote from Key Real Estate Capital →Opens keyrealestatecapital.com.
Price the loan before you commit
Your numbers
Share of purchase + rehab the lender funds
Results
85% of $575,000 project cost
Down payment + points + fees
Interest + points + fees
Loan is 69.8% of ARV. Within the ~70% of ARV range most hard money lenders are comfortable with.
What you'll need to qualify
- A deal with real margin — the loan under ~70–75% of a defensible ARV
- Cash for the gap: down payment, points, closing costs, and carry
- A concrete exit: sale comps or a refinance you actually qualify for
- A realistic rehab budget and timeline (lenders sanity-check both)
- Track record helps but isn't required — expect terms to reflect experience
The process, step by step
- 1
Term sheet
Address, purchase price, rehab budget, ARV, and your experience — quotes typically come back same-day.
- 2
Valuation
Appraisal or interior BPO establishing as-is and ARV. The speed bottleneck — order it immediately.
- 3
Title + entity docs
Hard money closes in an LLC as a business-purpose loan almost universally.
- 4
Close and fund
Purchase funds wire at closing; rehab funds hold back in a draw account.
- 5
Draws
Complete work, request inspection, get reimbursed. Budget cash flow for the lag between paying crews and receiving draws.
Mistakes that cost Frisco investors money
- Underestimating carry: six months of interest, taxes, insurance, and utilities is a real line item — model it
- Treating the ARV as negotiable — appraisers set it, and optimistic ARVs die in valuation
- No exit plan B: if the flip doesn't sell, can you refinance into a DSCR loan and rent it?
- Ignoring draw mechanics — slow draw administration can stall a rehab as surely as money running out
- Extending by default — extension fees compound fast; build schedule buffer into the original term
FAQ
- How fast can I actually close a hard money loan in Frisco?
- One to two weeks is realistic once the valuation is ordered; the record-setters close in under a week when title is clean and the file is complete. The practical bottlenecks are the appraisal and title work, not the lender's money.
- Do hard money lenders check credit?
- Most pull credit, but it's a pricing factor rather than a gate. The asset, your equity in the deal, and the exit plan carry the underwriting weight.
- Is hard money only for flips?
- No — acquisition speed plays (beating cash buyers), auction purchases, bridge situations, and properties too distressed for conventional financing are all standard uses. Anything short-term where speed or condition rules out a bank.
- What's the difference between hard money and private money?
- Colloquially, 'private money' often means an individual lending their own funds, while 'hard money' means a professional lending shop. Terms from individuals are relationship-priced and vary wildly; professional shops are more consistent and can be faster on documentation.