Real Estate Tips |6 min read

Using Hard Money Loans for Property Renovations

There are several great ways to use hard money loans. However, one popular method for real estate investors is to purchase and renovate a property to flip it for a profit. If you’re thinking about using a hard money loan for property renovations, read along as we go over some considerations for investors. 


Contents of This Article: 

Common Uses for Hard Money Loans

Hard money loans are short-term, unconventional real estate loans used by investors who normally don’t qualify for traditional loans. They’re typically funded very quickly, requiring less strict requirement criteria. Most Baltimore hard money lenders look more at the property’s collateral rather than your creditworthiness. That said, there are several great uses for hard money loans, including the following. 

  • Real Estate Investments- Real estate investors frequently use hard money loans to fund new property purchases. These loans are particularly useful when investors need quick access to capital, which traditional lenders may not provide within the necessary timeframe.


  • Fix-and-Flip Projects- Investors often use hard money loans for fix-and-flip projects. This strategy involves buying a distressed property, renovating it, and selling it at a higher price. The short-term nature of hard money loans aligns well with the quick turnaround typically associated with property renovations and selling for profit.
  • Bridge Loans- Hard money loans can also be used as bridge loans, helping individuals or businesses “bridge the gap” between purchasing a new property and selling an existing one. This can be crucial in situations where traditional financing options are not readily available.
  • Property Development- Property developers may opt for hard money loans to acquire land or finance the beginning stages of a development project. The speed and flexibility of hard money lending can be beneficial in the early phases of development, where quick access to capital is crucial.

Using Hard Money for Property Renovations

Using hard money for property renovations is an excellent strategy, as most lenders cover 100% of the renovation costs and release funds in a series of draws based on a mutually agreed-upon draw schedule. This strategy allows the borrower to access the necessary funds throughout the renovation process, aligning with the project’s timeline and financial needs. 

Traditional lenders may only cover a percentage of renovation costs, leaving the borrower to come up with the remaining funds. However, it’s important for hard money loan borrowers to thoroughly understand the terms and conditions of the loan, including the draw schedule, inspection fees, and more. 

It’s important to remember that hard money loans generally have much higher interest rates and potentially more fees than traditional loans do. So, if you’re planning on using a hard money loan for your next fix-and-flip project, you’ll want to consider the higher costs of obtaining the loan and renovation costs. 

Common Renovations and How Much They Cost

If you’re looking at a fix-and-flip investment strategy, you’ll need to plan out how much you’ll need to spend on renovations. That said, planning for renovation costs can be tricky, as each property is drastically different. 

According to, the normal price range for a full home renovation can be anywhere from $18,086 to $81,940, with an average cost of $49,977. Here’s a breakdown of some specific property renovations and how much they may cost. 

  1. Kitchen Renovation
  2. Bathroom Remodel
  3. Roof Replacement
  4. New Flooring
  5. Basement Remodel

Kitchen Renovation

Kitchen renovations are among the most popular upgrades for real estate investment properties. That said, they’re one of the most expensive parts of a property to remodel or renovate. You can expect to pay anywhere from $14,550 to $40,400. Ultimately, it depends on the size of the kitchen, your plan for upgrades, and what materials you use. 

For instance, if you’re going for a cheaper renovation, you may opt for minor upgrades, like adding a backsplash or upgrading the lighting. However, if you’re going for a full remodel, you’ll want to think about the cost of new flooring, custom cabinets, and smart appliances. 

Bathroom Remodel

Bathrooms are another excellent choice for renovations, as a nice bathroom can add a ton of value to a property. That said, remodeling a bathroom can generally cost around $11,250, depending on the size of the room and the materials you choose. Smaller bathrooms may cost less, around $6,000. However, depending on the complexity of your remodel, you can expect to pay more. 

Roof Replacement

Beyond renovating specific rooms within a property, there are several other projects to consider, including replacing the roof. That said, you can expect to pay around $11,500 or more for a full roof replacement.


Like any renovation or upgrade, it ultimately depends on the type of materials and the design of your roof. As such, your roofing cost estimate will vary based on materials and labor. 

Generally, the cost of installing a new roof costs between $4 and $40 per square foot, including both materials and labor. So, if you’re planning for a full roof replacement, you’ll want to consider the size of the home and which materials you’d like to use. Common roofing materials include asphalt shingles, metal, wood shingles, slate, and more. 

New Flooring

Fresh, new flooring can transform a home, making it a great use of money during a property renovation. That said, flooring installation can cost less than $1 per square foot to $10 or more per square foot, depending on the materials you choose. You can choose from a number of flooring options, including carpet, laminate, luxury vinyl flooring, tile, hardwood, and more. 

Basement Remodel

Remodeling a basement can be one of the most expensive parts of a fix-and-flip project, but the ROI is typically worth it. That said, a typical basement remodel can cost anywhere from $12,066 to $33,661. However, it ultimately depends on the basement’s size and condition, labor, and materials. 

Since it’s one of the largest spaces within a property, you can do many things to improve a basement, whether you add a bedroom, bathroom, home theater, or a home gym. While each of these additions will increase the cost, they can also improve your ROI when it’s time to sell.

Secure Financing for Your Investment Today

If you’re looking for a fix-and-flip loan to do property renovations, you may consider a hard money loan. They’re generally easy to qualify for, quick to obtain, and flexible regarding terms and conditions. However, it’s important to do research on local lenders to find one with the best rates, terms, and conditions that align with your investment goals. 

Looking for a hard money loan in Maryland? Look no further than Maryland Hard Money Lenders. Our team of experienced professionals can help you get the funds you need quickly and efficiently. Contact us to learn more, or fill out our initial loan application today!

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