BiggerPockets

between 10-15% APR

MAN, I WISH I HAD a Lender like THAT!
lol

With the current credit crunch money is scarce, even hard money, and it can be expensive. What I have done in the past is work a number (total cost for the use of the money) into the deal that will make the deal work. Example: If you can sell the property for 150K with costs to get it sold of 15K (commissions, closing fees), spend 100K buying and repairing and holding costs, this leaves a pre-tax net of around 35K (150 - 15 - 100 = 35). From that net number, calculate what you feel you would like to net after the costs of using the money. If your desired net is 20K, then you can not spend more than 15k for the use of the money. If you had the use of the money for a full year then the return to the money source would be a 15% return. Basically you are working the deal backwards to see what makes sense for you as a net on the deal, and then decide if this will allow a good enough return to satisfy the money source. It needs to be a win-win situation for both you and the money source, this way both parties feel good about the deal, want to get it done, and want to do more. Hope this helps.

Rob Beeman
Grindstone Financial
Hard Money Mortgages