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 You have significantly less time to pay off the loan — a few months to a few years, as opposed to traditional mortgage loans with payback periods of 15 to 30 years. If you can’t sell the property or refinance the loan by the deadline, you risk losing the property.

 Hard money typically requires a larger down payment than traditional bank loans — 10 to 20 percent or more — so if the property has a current market value of $200,000, the maximum you can borrow is $160,000 to $180,000. You need to come up with the other $20,000 to $40,000 yourself, along with money to cover holding costs and the costs of repairs and renovations. (See the next section for info about gap loans, which can help you make up the difference.)

 You may be required to make scheduled balloon payments over the term of the loan. Miss a payment, and you risk losing the property.

The approach for persuading a private lender to loan you hard money is the same as the approach for persuading a bank to finance your flips. See the earlier section “ssss1” for details.