As most house flippers or BRRRR landlords will tell you, paying for hard money—with high interest rates and points tacked on top—can take huge chunks of profit out of a project. For landlords, extra expenses are involved in making monthly payments and paying to refinance into a regular mortgage, further eroding the bottom line.

It’s generally a big pain and a reason many would-be-flippers and landlords stay on the sidelines or prefer to find private lenders, content to get paid once a deal sells or secures long-term financing post-rehab.

Learn more about your ad choices. Visit megaphone.fm/adchoices