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Securing funding is a common challenge for new investors.
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Access to capital is now more attainable. Options include lines of credit, private lenders, retirement funds, credit cards, and traditional bank loans. The key is to identify the funding source that best fits your needs. According to a report from LegalClarity, hard money lenders in Phoenix may seem like a practical funding option, but they carry significant financial risks due to high costs, short repayment periods, and the risk of rapid foreclosure, which could result in the loss of an entire investment. If you have not yet worked with a hard money lender in Arizona, now is a good time to learn more about them.
A hard money lender is an individual or group that provides financing based on the property and the borrower's financials, rather than solely on credit scores. Unlike traditional lenders, hard money lenders in Phoenix use their own criteria, offering greater flexibility but typically charging higher fees and interest rates. While bank loans may offer lower rates, they are not always suitable for time-sensitive deals. Hard money lending enables you to act quickly when needed. Below are some key benefits of working with a hard money lender:
- Speed: In today’s real estate market, the ability to close quickly is often more valuable than the offer amount. Traditional financing can take up to 45 days, causing many sellers to prefer a slightly lower offer if it means closing within a week. (Arnold, 2026) Hard money lending allows you to make competitive offers with five- or seven-day closings, increasing the likelihood your offer will be accepted.
- Volume: Faster closings mean you can begin projects sooner and complete more deals each year. Increasing your deal volume not only boosts your bottom line but also expands your professional network, potentially leading to additional opportunities.
- Quality: Access to hard money allows you to complete necessary work on properties without cutting corners. This approach can maximize your returns, enhance your reputation, and attract interest from realtors, investors, and buyers, helping you sell properties more quickly.
- Larger Projects: Increased capital enables you to pursue larger projects, such as multifamily or commercial properties. As you close more deals, your available capital and share in bigger opportunities can grow. While single-family properties remain viable, hard money gives you the flexibility to consider a wider range of investments.
Working with a hard money lender does not require you to use them for every transaction. Long-term buy-and-hold properties may be better financed with lower interest rates. However, most rehab projects benefit from the efficiency of hard money. According to Clear House Lending, hard money loans in Phoenix are intended to provide short-term financing that bridges the gap until you have permanent funding for your real estate projects. While working toward self-funding future investments, you may need to accept slightly lower margins on individual deals to help grow your overall returns.
The main drawbacks of hard money are higher fees and points, which accrue from settlement until the property is sold. While these costs can add up over several months, they are often outweighed by the benefits. You only incur these expenses on closed deals, and a hard money lender can help you close more transactions. Although it may not suit every situation, hard money should be considered as part of your financing strategy.
Matt Prosory RI/MLO/Broker
NCO Enterprises LLC
Private Hard Money
DBA Setabay/SetabayLoan/Level 4 Funding
26731 N 90th Drive
Peoria AZ 85383
Matt@Level4Funding.com
Telephone: 623-582-4444
NMLS 2062278 NMLS 1118493
References
Arnold, R. (April 12, 2026). How Long Does It Take to Close on a House?. Rocket Mortgage. https://www.rocketmortgage.com/learn/time-to-close-on-a-house
DeNardo, E. (October 15, 2024). ‘Bidding Competitively And Winning Deals’: Why Private Capital Remains An Integral Part Of Phoenix CRE. Bisnow. https://www.bisnow.com/phoenix/news/capital-markets/bidding-competitively-and-winning-deals-why-private-capital-remains-an-integral-part-of-phoenix-cre-126016
(2026). Hard Money Lenders Arizona | Hard Money Loans in Phoenix & Scottsdale, Arizona. Hard Money Lenders Arizona. https://www.hardmoneylendersarizona.com/
(2023). Hard Money Loans Phoenix | AZ Investor Guide. Clearhouse Lending. https://www.clearhouselending.com
Arizona, R. E. (2026). Cap Rates in Phoenix Explained. https://www.realestateplusaz.com/cap-rates-in-phoenix-explained/
(2026). Hard Money Loans Phoenix | AZ Investor Guide. ClearHouse Lending. https://www.clearhouselending.com/commercial-loans/phoenix/hard-money-loans
Matt Prosory RI/MLO/Broker
It’s like a grade that predicts whether you might miss a mortgage payment soon. Lenders review your score to judge risk. (Does my credit score affect my ability to get a mortgage loan or the mortgage rate I pay?, 2024) A low score is like an F in school, making lenders nervous. Think of your credit score as a GPA for borrowing. If you’ve struggled with a mortgage, your GPA drops. Some have high GPAs, others have mixed grades. The credit “school” never ends, so keep your score as high as possible. How do you raise your credit GPA? The answer is similar to what you did in school:
Between 580 and 669
Matt Prosory RI/MLO/Broker
Dad was the son of a Swedish immigrant who decided to start a dairy farm in northern Wisconsin. My dad grew up milking cows every day and not having much fun. Back then, dropping out of school was common, and you were not looked down upon for stopping. My dad lacked an education, having never finished high school; he’d say, “Don’t need a high school diploma to milk cows.” 
Dad’s first home, which he purchased in California, was in Monrovia on Pamela Rd. He bought it in 1960 for some ridiculous low amount and too long ago to remember, but he sold it in 1972 for $11,000. Dad should have kept it and rented it out. Payments on the house were $29/month. Rents would generate around $100/month, a positive cash flow of $71. But for some reason, he thought he could not do it. It just did not make sense to Dad. He probably never thought of the idea or considered the possibilities.
Dad started fixing those damn TVs for Sears, and he was good at it; he became an expert. So good that Sears wanted him to teach others the skill of fixing those damns TVs. As a result, he received a promotion and more money, but one major problem was about to come back to haunt him – no high school diploma. Mom and Dad would talk about it at night in whispers; they would say, “Do you think Sears will find out? Will you lose the job?
This second home, a vacation property, was up in the mountains in Frazier Park, about 70 miles north of Los Angeles, in the middle of nowhere at the time. It was a nice cabin with two small bedrooms, a much bigger house than the house on Pamela Road. Two homes at the same time, a nice leap in financial prosperity.
the San Gabriel Foothills of Monrovia; purchased at the right time and with the right financing terms: a fixed 6% note. A bigger house, with views of the city lights, where all the rich people from the church lived. When the cabin was finished, he rented this property to move to the mountains. Good idea to rent the house. A very good positive cash flow, and the homes in the area were appreciating. The mistake here was making the mountain home his permanent residence. Mom always said, “It was a mistake moving here,” and she would say it often to Dad. However, he got cash fever and no longer wanted to rent it out, so Dad sold the house for $110,000 in 1979. A great investment: he netted around $90,000, quickly put it in the bank, and then began spending it on depreciable assets (cars). 
Fortunately, when he had to make the move to the fourth house due to mom’s illness, the house in the mountains appreciated in value. He realized his mistake of moving to the middle of nowhere, with no jobs, no income, and no medical facilities. The nearest hospital was 90 miles away down Interstate 5 – the “grapevine”. Dad desperately needed to move again. His final purchase was another mistake, a double-wide in Castaic, CA. He netted around $100,000 for the mountain house, but again started spending it on depreciable assets (cars) for himself and my sister.
