Where do hard money lenders get their money?

Hard money lenders typically get the money they lend from private investors or from a pool of investors. These investors are often individuals or groups who are looking to invest their money in real estate without having to deal with the challenges and risks of owning and managing properties themselves.

Hard money lenders raise capital from these investors and then lend the money out to real estate investors at a higher interest rate than traditional banks. The interest rate on a hard money loan is typically higher than a bank loan because hard money lenders are taking on more risk by lending to borrowers who may not qualify for traditional financing.

Some hard money lenders may also use their own capital to fund loans, particularly if they are smaller lenders or if they have a significant amount of capital at their disposal. However, many hard money lenders rely on outside investors to fund their lending operations.