Hard Money Loan
A short-term loan from a private lending company, secured by the property and underwritten mainly on the asset’s value — often its ARV — rather than the borrower’s income. Rates and fees run well above conventional mortgages, but closings are fast and condition requirements are loose, which is why flippers and BRRRR investors use them as bridge financing.
Related terms
Private Money
Loans from individuals — often people the borrower knows, or investors seeking yield — rather than from banks or hard money lending companies. Terms, rates, and security are whatever the two parties negotiate, which makes private money more flexible and more relationship-dependent than institutional lending.
ARV (After-Repair Value)
The estimated market value of a property after planned renovations are complete. ARV is usually derived from comparable sales of already-renovated properties nearby. Flippers and BRRRR investors work backward from ARV to set a maximum purchase price and renovation budget.
BRRRR
Buy, Rehab, Rent, Refinance, Repeat — a strategy where an investor buys a property below market value, renovates it, places a tenant, then refinances against the new appraised value to recover much of the invested cash before repeating the cycle. The refinance step depends on the post-rehab appraisal and current lending terms, which is where the strategy carries most of its risk.