Whats competitive hml rate for

Question

I noticed its pretty hard to find a hml that will lend less than 50k, so for the investors out there who have found those deals before, what was the rate and point structure like? How bout the terms?

Not sure if you have seen higher than avg points and/or rates with maybe interest only or no interest payments.

Appreciate any insight BP!!

Jay Hinrichs · Answer

follow up to last post.. Minimum income requiremetns for ME not he borrower. I only do deals I can make 5k on period. If someone is trying to buy a home and make a 3 to 5k wholesale flip fee then they need friends and family to capitalize those ventures. NO way I am going to loan 20k at 3 points Make a whopping 600.00 dollars and take the risk that I have to eat the 20k or end up god forbid having to foreclose

Jay Hinrichs · Answer

One of the issues in certain states with sub 50k loans is usury rates.

The other and I am a HML is as stated there is just as much work in a larger loan as well as smaller.

And the other issue is the collateral sub 50k homes or loans at 20k are usually In areas that only locals work and the values are suspect on the ARV side.. As the areas are just full of low end rentals.  If that all makes sense.

that all said I carved a NIche for myself in the low end market. loans at 30 to 60k.. But I have minimum income requirements. I make 5k per loan in loans fee's period.. other wise its not worth the time effort or RISK. The vendors I deal with are very experienced and move usually 3 to 10 properties a month in their market. They already have resale channels establish.. PM well under control and they control rehab.

JLH

Dell Schlabach · Answer

Similar to @Ned Carey locally smaller rehab lender hang out at riea group. 13-15% plus 2-3 points, interest only payments, 6-12 month.

If you develop relationships and have some experience under your belt, quite a bit of money floating around from private lenders from 8-12%, no points, Iin my experience.

Max I am paying is 10% no points, I pay all interest upon note payoff, no monthly payments.

Ned Carey · Answer

Hard money rates vary around the country. Although there are national players, most hard money lenders are local. In my area, HMLs under 50K are easy to find. Typical rates in my area are 15% and 3 pts.

There is a Hard money lender list here on the site under the resources tab above. That may be helpful.

Whats competitive hml rate for < 50k?

Most Popular Reply