Hard Money vs Private Money

While Blake isn't a private lender or hard money lender, a common question we get is about the difference between these two. The answer is tricky because there is so much overlap between them. On the whole, hard money lenders tend to be more rigid with terms, more likely to be institutional, and may be less creative than a private money lender. It's been said that hard money lenders tend to be more asset-based, but that's also true of most private money lenders. The lines tend to blur more than they don't, so it's no wonder these terms are so often used interchangeably even by industry players.

Let's take a step back for a moment and recognize that "Private Money" doesn't necessarily mean Private Money "Lender." Private Money Lenders are typically dealing in debt, or liens against a subject property which may need to be foreclosed in cases of nonperformance. Alternatively, here at BlakeSelby.com, we specialize in equity and joint venture partnerships. Although we could still technically be considered Private Money, we are not lending on or financing properties. Benefits of private money over private lenders or hard money lenders may include vision shaping, added flexibility & creativity, and fast execution. Private Money is such a broad umbrella term that could mean anything from angel investment to private equity and beyond.

In conclusion, don't worry too much about mixing up the hard money lender or private money lender terminology because they are virtually the same thing. Just keep in mind that private money doesn't always mean private money lender.