How to get a hard money loan. Follow the steps.

 By Matt Prosory Broker/RI 623-582-4444

NMLS 118493 AZMB 2062278
June 8, 2026  

Most real estate investors depend on Private Money to help fund their deals, usually through private money loans.

But where can you actually find this steady source of funding? Institutional loans often take a long time and can slow down a residential redeveloper's progress.

The main questions investors ask are how to find a private money lender in Arizona, how to convince them to lend you the Money you need, and how private lender financing actually works. Having access to real estate investment capital helps investors grow their businesses over time.

Below are the key things you need to know about private lender loans. Understanding these points will help you prepare for the process and make you appear more credible to potential lenders.

How to Acquire a Private Lender Loan

Private lender loans differ from traditional bank loans. Getting a private lender loan is not the same as getting a traditional bank loan. The process is different, too. We underwrite and fund a loan in as little as 7-21 days. Banks can take up to 90 days to accomplish the same thing. (Geraci, 2025) The timeframe offered by an Arizona private money lender is generally conducive to the deals a typical investor wants to finance.

Asset-based Lending: Private lenders focus mainly on the value of the property itself. This means you don't have to depend on your credit score to get a loan. (Team, 2025)

Control & Profitability: When you use private Money, you have more control over your loan and don't need to bring in equity partners. (Geraci, 2025)

Shorter-Term Loans: Private money loans usually have shorter terms than traditional loans, which can help you avoid late penalties. (Hayes, 2026) Guarantee of Capital: Private capital provides borrowers, especially independent investors, with a reliable way to grow their businesses. Having a steady source of funds is key for this.  

Understanding Private Loans

At Money and experience are the two most important things a private money investor needs. The best private lenders in Arizona usually have a solid real estate background and a history of finding good lending opportunities. Even more important, they tend to focus on local markets, since knowing the area well is crucial for success. (Geraci, 2025) Understanding where a market is headed is a valuable skill. Your Private Lending Business: Determining Deal Viability

Private lenders want to make Money, so managing risk is very important to them. Here are eight things they look at to decide if a loan opportunity is worth it:

• Market Value
• Borrower Credit
• Borrower Equity
• Additional Collateral
• Lien Priority
• Pricing Strategy
• Exit Strategy
• Due Diligence

You should consider all these factors before deciding to go after a loan opportunity. If you skip due diligence or ignore any of these points, you could face serious problems. Take your time and handle the process carefully.

Proper Documentation

Having the right paperwork for a private money loan is very important. Many people don't realize that the documents for an Arizona private money loan are similar to those for a regular loan. You'll need to sign a promissory note, a written promise to repay the loan, and a mortgage, which serves as collateral for the lender. For residential loans, you might also need an outside appraisal, a property inspection report, a geology inspection, and your financial records. Most private money lenders also want to see the property in person, which is why they usually focus on local deals. (Hard Money Loans Arizona | Hard Money & Private Money Lender, n.d.) A hard money lender's requirements may vary; standard documents are associated with every transaction. Typical loan documents include, but are not limited to:

Letter of Intent (LOI): A formal document that acknowledges that all parties are on the same page. It outlines an agreement between two or more parties before the deal is finalized. While it is not legally binding, it is a preventative measure for miscommunication.

Purchase & Sale Agreement: The purchase and sale agreement, or P&S agreement, is the document issued after both parties accept an offer that sets the final sale price and all purchase terms. Some items covered in the P&S agreement include the final sale price, earnest money details, closing date, title condition, contingencies, and more. Inclusions on the P&S contract will differ from state to state.

Preliminary Title Report: A title is a legal document listing the history of ownership of a home. After the buyer and seller have reached mutual acceptance, an attorney or title company will review the home's title to look for any problems that might prevent the home from being legally sold. The results are written up for the buyer in a preliminary title report. A description of this nature will reveal if anyone other than the seller has a legal claim to the property.

Title Insurance: Title insurance, as its name suggests, is a preventative measure that protects a buyer from anyone who challenges a property's ownership.

Proof of Funds: It represents a buyer's intent. It is a way for borrowers to demonstrate they have sufficient funds to complete a transaction. Typically, a bank statement, retirement account statement, or other legal form is acceptable.

Proof of Insurance: Proof of insurance is required for either a purchase or refinance to avoid a devastating loss.

Personal Guarantee: A personal guarantee requires the borrower to put some skin in the game. In other words, the borrower puts their assets (real estate, savings, etc.) on the line. Of course, this applies only when the borrower can't repay the loan.

Mortgage Note: A mortgage note is a promissory note secured by a mortgage loan. The loan structure is agreed upon, and the borrower signs the document.

Legal Documentation

A traditional one-page form note and two-page form deed of trust no longer address the myriad of issues in today's legal environment. Environmental problems, lending issues, and the enforceability of securities and protections must be addressed. (Arizona Association of REALTORS®: Seeking Real Estate Investors? Compliance with Securities Laws is Critical., 2020)

Legal documentation should be consistent with institutional lenders' employment practices, eliminating only provisions that may not be relevant or unnecessary. Additionally, special consideration must be given to a well-drafted broker's affidavit, especially in states where a licensed real estate broker must broker an otherwise unethical loan.

 Summary

Private Money can help investors fund deals when they don't have enough from traditional loans or their own cash. Private lenders are willing to lend if you can show that your investment will be profitable. You'll need to have the right paperwork to prove your deal is solid. If you do your homework and pay attention to details, you'll be close to getting your next private money loan in Arizona.

 

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 118493 AZMB 2062278

 

References

Geraci, A. (2025). Arizona Private Money Lending: Licensing, Compliance & Document Requirements. Automate Loan Docs. https://automateloandocs.com/pages/blog/arizona-private-lending-guide.html

Geraci, A. (2025). Arizona Private Money Lending: Licensing, Compliance & Document Requirements. Automate Loan Docs. https://automateloandocs.com/pages/blog/arizona-private-lending-guide.html

Team, L. (2025). How Hard Money Asset-Based Lenders Work. LegalClarity. https://legalclarity.org/how-hard-money-asset-based-lenders-work/

Geraci, A. (2025). Arizona Private Money Lending: Licensing, Compliance & Document Requirements. Automate Loan Docs. https://automateloandocs.com/pages/blog/arizona-private-lending-guide.html

Hayes, C. (2026). Real Estate Private Loans: Short-Term Financing Options and Trade-offs. Smarter.com. https://www.smarter.com/so-smart/real-estate-private-loans-short-term-financing-options-trade-offs

Bachas, N., Kim, O. & Yannelis, C. (2021). Loan Guarantees and Credit Supply. Journal of Financial Economics 139(3), pp. 872-894. https://doi.org/10.1016/j.jfineco.2020.08.008

(n.d.). Hard Money Loans Arizona | Hard Money & Private Money Lender. Metro Private Lending. https://metroprivatelending.com/

(April 21, 2020). Arizona Association of REALTORS®: Seeking Real Estate Investors? Compliance with Securities Laws is Critical.. Arizona Association of REALTORS®. https://www.aaronline.com/2020/04/22/seeking-real-estate-investors-compliance-with-securities-laws-is-critical/

Equal Housing Opportunity. This is not a Good Faith Estimate nor a Guarantee to lend and should not be considered as such. Costs, rates, estimates, and terms can only be determined after completing an application. Actual payments will vary based on your situation and current rates. APR for loans ranges from 7.99 - 29.5% and is based on Credit Score, Down Payment, LTV, and Income. Mortgage rates could change daily. For more accurate, personalized results, please call 623 582 4444 to speak with a licensed mortgage expert. Terms and conditions of all loan programs are subject to change without notice. NCO Enterprises LLC Dba Setabay Private Hard Money 26731 N 90th Drive Peoria, AZ 85383 Telephone: 623-582-4444 NMLS 2062278 NMLS 1118493 This email is for the exclusive use of the intended recipients and may contain privileged and confidential information. If you are not an intended recipient, please notify the sender, delete the email from your computer, and do not copy or disclose it to anyone else. Your receipt of this message is not intended to waive any applicable privilege. Neither this email nor any attachments establishes a client relationship, constitutes an electronic signature, or provides consent to contract electronically unless expressed by Matt Prosory, RI/CEO, in this email or an attachment. To the extent this message includes any tax or legal advice. This message is not intended or written by the sender to be used, and cannot be used, for legal or tax purposes or advice. This email is an advertisement.

Advantages of a Hard Money Loan

 

Securing funding is a common challenge for new investors.

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:

1. 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.
2. 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.
3. 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.
4. 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

Flip Houses With No Money & Bad Credit

 

Multiple funding options are available, some of which do not require your own capital. Using other people's money is considered a prime strategy in real estate investment. Private lenders, hard money lenders, and experienced house-flipping investors are all practical funding sources for your next deal. Here are some options for flipping a house without your own funds:

1. Private Lenders

Private lenders often act as an investor’s primary funding source. They function as banks without the cumbersome process of traditional lenders. Arizona private lenders can be anyone with surplus funds, an interest in investing, and openness to negotiation. More importantly, private lenders are independent from financial institutions or government-backed agencies. This independence allows them to set their own terms.

Paying a higher interest rate is worthwhile if it secures quick funding. Many investors value the ability to act quickly over securing the lowest interest rate. In contrast, traditional banks may require 30 to 45 days to close, risking the loss of a deal.

Most private lenders want to be protected, so they usually ask you to sign a document promising to pay and use the property as security. Sometimes, they may want you to back up the loan with your other assets, but you can talk to them about the terms.

1. Hard Money Lenders

Hard money lendersare companies offering specialized short-term real estate-backed loans. According to Level 4 Funding, a hard money lender in Arizona, the company specializes in providing loans for various property types and typically serves borrowers who may not qualify for traditional financing. While typical transactional lenders offer loans of 15 or 30 years, Phoenix hard money lenders typically offer terms of 6 months to 2 years (Lenders Arizona, n.d.). Also, their lending guidelines are looser than traditional institutions, and their rates are slightly higher. Arizona hard money lenders usually charge 11 to 15 percent interest and about one to five points (upfront fees based on the loan amount). (Hard Money Loan Rates 2026: 9%-15% + Fee Breakdown, 2026) However, there are no universal guidelines; each lender has different criteria.

New England Home Buyers state, "You can finance allrepairs with hard money lenders. Unlike traditional loans, hard money loans don't depend on your credit score. However, these loans have higher fees and rates. Interest typically ranges from 8% to 15%, and points from one to five."

Most Arizona hard money lenders typically finance only about 70 percent of the purchase price. This means investors hoping to avoid using their own cash may need to combine financing with private lenders.

What Is The 70% Rule in House Fix and Flip Lender?

Home flippers follow a clear model: buy a low-priced house, renovate, and resell for profit. To guide offers, use the 70 percent rule—pay no more than 70% of the after-repair value minus renovation costs. Estimate the future value post-renovation, multiply by 70%, then subtract repair expenses to find your maximum purchase price.

After-repair value (ARV) ✕ .70 − Estimated repair costs = Maximum buying price (Brumer-Smith, 2025)

The 70% rule is only a guideline. Before buying, research market trends, consult real estate pros for realistic resale values, and meet contractors to assess repair needs.

How To Find Arizona Hard Money Lenders

Hard money lenders operate across the country, so finding them is essential. Search online for hard money lenders in Arizona or Phoenix. You'll find companies offering these loans. Attend real estate investor meetings to meet lenders directly. Also, consult real estate professionals in your network or ask for introductions to experienced lenders.

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

Geraci, A. (2025). Arizona Private Money Lending: Licensing, Compliance & Document Requirements. Automate Loan Docs. https://automateloandocs.com/pages/blog/arizona-private-lending-guide.html

(2025). How long does it take to close on a house?. Opendoor. https://www.opendoor.com/articles/how-long-does-closing-take

(n.d.). Hard Money Lenders Arizona. HardMoneyHome.com. https://www.hardmoneyhome.com/lenders/view/hard-money-lenders-arizona

(2026). Hard Money Loan Rates 2026: 9%-15% + Fee Breakdown. ClearHouse Lending. https://www.clearhouselending.com/blog/hard-money-loan-rates-guide

(2023). Hard Money Lenders Arizona - Reviews, Rates, & Lending Guidelines. HardMoneyHome.com. https://www.hardmoneyhome.com/lenders/view/hard-money-lenders-arizona

Brumer-Smith, L. (2025). What is the After Repair Value?. The Motley Fool. https://www.fool.com/investing/stock-market/market-sectors/real-estate-investing/basics/arv-formula/

How do you fix your bad credit report.

Are you looking for a loan with less-than-ideal credit? Your credit score shows lenders how likely you are to repay what you owe. (FICO® Scores - The Most Widely Used Credit Scores, n.d.)

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:

1. Aim for a better grade. Start by paying those you owe. If you have debts in collections or past due, focus on paying them. Even with an F before, repaying debts can bring your score to a C+.
2. Avoid more F’s on your record. Pay your mortgages on time. Take payments seriously and don’t be late. Late or missing payments lower your score. (Credit Scores | Consumer Advice, 2024) Pay on time to keep your credit GPA high.
3. Don’t borrow more than you can handle. Only take what you can manage. For credit, avoid too many loans or mortgages. Keep your mortgage balance below 30% of your credit limit. (Fiano, 2019) Lenders worry if you’ve maxed out cards and want another loan. The more loans, the higher the chance of missed payments, including your new mortgage.
4. Try to remove bad marks from your report. Disputing errors with credit bureaus quickly improves your score. (How do I dispute an error on my credit report?, 2024) If a mistake is removed, your score goes up. Dispute mistakes with each bureau. If they agree, your score improves. If not, keep using the earlier steps to raise your score.

The good news: your credit score is averaged over time. Time helps. Your score is based on recent and past activity, typically over the past three to five years. (Adam & Thomas, 2026) Negative marks will eventually disappear. With good habits, your score will rise, improving your chances for an Arizona home loan even after credit issues.

 

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

Equal Housing Opportunity. This is not a Good Faith Estimate, and it is not a Guarantee to lend; it should not be considered as such. Costs, rates, estimates, and terms can only be determined after a full application is completed. To the extent this message includes any tax or legal advice, this message is not intended or written by the sender to be used, and cannot be used, for legal or tax purposes or advice. This is an advertisement. Copyright © 2026.  All rights reserved

 

References

(n.d.). FICO® Scores - The Most Widely Used Credit Scores. myFICO.com. https://www.myfico.com/credit-education/fico-scores-bridge

(2024). Does my credit score affect my ability to get a mortgage loan or the mortgage rate I pay?. Consumer Financial Protection Bureau. https://www.consumerfinance.gov/ask-cfpb/does-my-credit-score-affect-my-ability-to-get-a-mortgage-loan-or-the-mortgage-rate-i-pay-en-319/

(2024). Credit Scores | Consumer Advice. Federal Trade Commission. https://consumer.ftc.gov/articles/credit-scores

Fiano, L. (January 14, 2019). Credit score myths that might be holding you back from improving your credit. Consumer Financial Protection Bureau. https://www.consumerfinance.gov/about-us/blog/credit-score-myths-might-be-holding-you-back-improving-your-credit/

(2024). How do I dispute an error on my credit report?. Consumer Financial Protection Bureau. https://www.consumerfinance.gov/askcfpb/1303

Adam, J. & Thomas, R. (2026). How Your Credit Score Is Calculated. ConsumerAffairs. https://www.consumeraffairs.com/online/how-is-credit-score-calculated.html

You can still buy a house in Arizona even with bad credit.

Credit reports mainly show how likely you are to repay debts, but they do not automatically decide if you qualify for a mortgage. However, having a higher credit score usually means you’ll get better rates and more options.

To buy a house with bad credit, start by knowing how lenders view your credit score. Here’s a general guide to what you can expect based on your credit score.

 

FICO Score:

Less than 580: Theoretically, borrowers Less than 580: You might still qualify for a loan with a FICO score below 580, even as low as 500. If your score is between 500 and 579, you’ll only be able to get an FHA loan. Because lenders consider these loans risky, the Federal Housing Administration requires insurance for them. You’ll also need to make at least a 10% down payment and pay off any unpaid collections or judgments to qualify.

Between 580 and 669 may also qualify for an FHA loan, but won’t necessarily have to put as much money up front. Many borrowers in this range may qualify for an FHA loan with as little as 3.5% down. Perhaps even more importantly—for some—this is the range that qualifies borrowers for Department of Veterans Affairs (VA) loans. This range is also the range borrowers may be able to apply for a conventional loan (if they meet other requirements).

670 – 739: With a FICO Score between 670 and 739, you can apply for conventional loans. Because you are seen as less risky, you’ll have more loan options available.

740–799: If your score is in this range, lenders see you as having very good credit. You’ll likely get more credit and better rates.

800 or more: A credit score of 800 or higher shows lenders you are a very low risk. You are most likely to get the largest loans and the best rates available.

Home loans are available to people with bad credit. Still, the higher your credit score, the more options you’ll have.

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

Equal Housing Opportunity. This is not a Good Faith Estimate, and it is not a Guarantee to lend; it should not be considered as such. Costs, rates, estimates, and terms can only be determined after a full application is completed. To the extent this message includes any tax or legal advice, this message is not intended or written by the sender to be used, and cannot be used, for legal or tax purposes or advice. This is an advertisement. Copyright © 2026.  All rights reserved

References

(2024). What is a credit report?. Consumer Financial Protection Bureau. https://www.consumerfinance.gov/ask-cfpb/what-is-a-credit-report-en-309/

(2026). FHA Loan Requirements in 2026. FHA.com. https://www.fha.com/fha_loan_requirements

(2025). FHA Home Loan Down Payments. FHA.com. https://www.fha.com/fha_article?id=4034

(2024). VA Home Loan Entitlement And Limits. U.S. Department of Veterans Affairs. https://www.va.gov/housing-assistance/home-loans/loan-limits/

(2024). FICO Scores and Your Credit. FHA.com. https://www.fha.com/define/fico-score

Doyle, A. B. & Arnone, J. (2026). Best Conventional Mortgage Lenders of 2026. NerdWallet. https://www.nerdwallet.com/mortgages/best/conventional-mortgage-lenders

Finance, K. P. (December 31, 2025). What Is a Good Credit Score?. Kiplinger. https://www.kiplinger.com/personal-finance/what-is-a-good-credit-score

Team, L. (2026). What Can an 800 Credit Score Get You: Rates & Rewards. LegalClarity. https://legalclarity.org/what-can-an-800-credit-score-get-you-rates-rewards/