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Hard money brokers earn 1-2 points (1-2% of the loan amount) per closed deal, paid by the borrower at closing. On a $250,000 loan at 1.5 points, that is $3,750 per deal. On a $500,000 loan at 2 points, that is $10,000. Volume and average loan size drive total income. A broker closing 3-4 deals per month at average loan amounts is earning a real income. A broker closing 10+ deals per month at higher loan sizes is in a different category entirely.
Hard money broker fees are typically paid at closing by the borrower as part of their closing costs. The fee is separate from — and in addition to — the lender's own origination fee and points.
Standard broker compensation: 1-2 points on the loan amount. Some brokers charge a flat fee on smaller deals; most charge a percentage.
Who pays: The borrower. The lender does not pay the broker directly in most hard money transactions (this is different from some mortgage models where lenders pay broker commissions).
When it is paid: At closing, out of the borrower's closing costs. It appears on the settlement statement.
Disclosure: The broker fee must be disclosed to the borrower before closing — typically at the time of the initial term sheet or early in the application process. Borrowers should not be surprised by a broker fee at the closing table. That is not how you build a referral business.
Here is what broker income looks like at different deal frequencies and average loan sizes. These are illustrations, not guarantees.
Part-time / getting started:
Full-time, building:
Scaled operation:
The numbers get very large with volume. The constraint is deal flow and capacity, not the fee structure.
Move up in average loan size. A $500,000 deal at 1.5 points pays $7,500. A $200,000 deal at 2 points pays $4,000. Higher loan sizes increase income per deal without requiring more deals. This happens naturally as you build expertise in higher-value deal types (commercial, large construction, bridge) and attract more sophisticated borrowers.
Charge an appropriate fee for the value you provide. New brokers sometimes undercharge because they are not confident in their value. A broker who places the right lender on the first submission, manages the file efficiently, and closes on schedule is worth 2 points. Know your value.
Add services that earn additional compensation. Some brokers charge a processing or document preparation fee in addition to the broker origination fee. If you are genuinely providing document management services, this is legitimate. Be transparent with borrowers about all fees upfront.
Handle both sides of BRRRR deals. If your borrower does a fix and flip and then refinances into a DSCR loan, you earn on both transactions. A borrower doing 4 BRRRR cycles per year is potentially 8 fee-generating transactions.
Maximizing fees at the expense of deal quality. Charging 3 points when 1.5 is market rate means you close fewer deals, get fewer referrals, and damage your reputation. Short-term fee optimization produces long-term deal flow destruction.
Choosing lenders based on who pays you more. Some lenders offer broker compensation bonuses or higher yield-spread premiums. Choosing a lender because they pay you more rather than because they fit the deal is a conflict of interest. Do not do it.
Hiding fees. Every fee you charge should be disclosed to the borrower before they commit. Borrowers who discover a fee they were not told about become former borrowers and negative word-of-mouth. Transparency is not just ethical — it is good business.
Hard money brokering is a volume business. The brokers who earn significant income are not earning it on massive per-deal fees — they are earning it by closing many deals efficiently.
This means the investment in systems, relationships, and marketing that makes each deal easier to close and reduces the time per transaction is the highest-leverage thing a broker can do. A deal that takes you 60 hours to close pays the same as a deal that takes 10 hours to close — but the 10-hour deal lets you do six times as many.
Time per deal goes down with experience, with better systems, and with better lender matching on the first submission. The goal is not to charge more per deal — it is to close more deals per month with the same effort.
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