Hard money by its very nature is expensive, but it is a vital part of a real estate investor’s tool kit, and often it is well worth the expense. As an investor your need for cash can quickly exceed your own personal resources. You eventually will need access to cash from other sources. Whether it’s to fund a purchase of a great wholesale deal, the money to finance a fix-and-flip, or funds to buy a rental [which you will quickly refinance at a lower rate later].
When choosing a hard money lender, my advice is to shop around and find a lender you are most comfortable so you build a long term relationship so you can keep coming back. Anticipate that your transaction will be the most expensive, as you both are feeling each other out. As you develop a track record and comfort level this will change, but always remember EVERYTHING IS NEGOTIABLE.
Here are some questions I compiled from different sources, to use when interviewing and deciding on using hard money. Always have an attorney review your documents from a hard money lender.