"Hard money" sounds like one thing. It's actually a product line. The phrase covers several different loans that share one trait: they're short-term, asset-backed loans made by private lenders rather than banks, priced on the property and the plan instead of a borrower's tax returns.

If you're weighing private real estate lending as an investment, it helps to know what's under the hood. Below are the five hard money loan types you'll run into most often, what each one is for, and where the risk sits. At the end, a plain note on which of these we actually fund and why.

The five hard money loan types, one at a time

Fix-and-flip loans. The classic. An operator buys a house that needs work, renovates it, and resells it. The loan covers the purchase and often part of the rehab, and it's repaid when the property sells. Terms are short, usually six to twelve months. The risk is execution and exit: the renovation has to come in on budget, and the finished house has to sell at the expected price. A conservative lender sizes the loan well below the after-repair value and confirms there's a real buyer pool before funding.

Bridge loans. A bridge covers the gap between two points. An investor needs to close quickly, or needs money now and permanent financing later. The loan bridges until the property sells or refinances into a long-term mortgage. Bridge loans are flexible and fast, which is the whole point, but the exit matters more than anything: if the sale or refinance that's supposed to repay the loan doesn't materialize, the borrower is stuck.

New construction loans. These fund ground-up builds, and money is usually released in stages (draws) as construction hits milestones. New construction carries more moving parts than a flip: permitting, weather, materials, labor, and a longer timeline mean more can go wrong between the first draw and the final sale. The upside is that a well-located new build can command a premium. The risk is duration and completion, so these loans demand a builder with a track record and real contingency in the numbers.

Rehab-to-hold loans. Sometimes called BRRRR (buy, rehab, rent, refinance, repeat), this is for investors who want to keep the property as a rental instead of selling. The short-term hard money loan funds the purchase and rehab, then gets refinanced into a long-term mortgage once the property is stabilized and generating rent. The risk shifts from will it sell to will it appraise and cash-flow well enough to refinance. If rents or appraised values come in soft, the refinance can fall short of paying off the original loan.

Cash-out refinance loans. Here the borrower already owns a property and wants to pull equity out of it, often to fund the next deal. A hard money cash-out refi can move faster than a bank refinance, which is useful when timing matters. The trade-off is leverage: taking cash out raises the loan-to-value on an existing asset, so a disciplined lender keeps a firm ceiling on how much equity comes out.

What separates a safe hard money loan from a risky one

Notice that the loan label matters less than the structure around it. Across all five hard money loan types, the same handful of questions decide whether the loan is conservative or reckless. Is the lender first in line if something goes wrong, or standing behind a bank? How much of the property's value is the loan, and is there a firm cap? Is there a funded, credible way the loan gets repaid, a real buyer or a real refinance, or just an optimistic plan? And does the lender actually know the neighborhood, or are they trusting a spreadsheet from three states away? Two loans with the same name can sit at opposite ends of the risk spectrum depending on those four answers.

Where 890 Capital lends

We don't chase all five hard money loan types. We lend where we can stay conservative and fast: first-position, short-duration loans on real property in the Charleston tri-county. In practice that's mostly fix-and-flip and bridge loans, with some new construction for builders we know well.

Every loan we make follows the same rules regardless of type: first-position mortgage, always; a 75% loan-to-value cap, with our average closer to 66%; only in the Charleston tri-county, where we can underwrite a deal block by block; and a funded, credible exit before we lend. The result across every loan since inception has been zero foreclosures, with investor distributions paid monthly by the 5th.

That discipline is the product. The loan type is just the tool.

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For accredited investors only. Past performance does not guarantee future returns. See 890capital.com for full disclosures.