A distressed property may be for sale for $200,000, which is discounted from its true value of $325,000 because of all the necessary repairs. A traditional lender will offer a conventional loan of up to 75 percent of the purchase price of the home that would be, at most, $150,000. The hard money lender will offer up to 75 percent of the after-repair value, which can be up to $243,750. These loan funds can be used to renovate the property and make huge profits.