Reasonable Hard Money Lenders..Suggestions?

Question

I've just gotten into flipping and unfortunately don't have the means to go all cash now but have excellent credit, experience in long term rentals, assets, and I need a reasonable hard money lender to work with. I'm closing on a house for $160,125 that is move-in ready. A reasonable estimate is $270k on the current condition. Rehab is not required but I want to change the house with a rehab in the $30k-$50k range. I may only increase the value the cost of what I put in but it will make the house sell faster. I'm being quoted in the range of 13% on hard money and that seems high. I won't be in this house more than 6 months max...I will get it done and have it sold. I am looking for quick close hard money for the property. Any suggestions appreciated...Currently have 6 mortgages, A primary residence...4 long terms rentals, one of which is about to go on the market and an investment/second home/vacation rental. Appreciable equity in all except the vacation rental which is about $740k right now and owe about $650k.

Account Closed · Answer

@Gary Fischer

Good luck!

Account Closed · Answer

@Gary Fischer

No problem.  That's the issue - you are outside of conventional standards.  It's more expensive primarily because this deal has a different risk profile than a conventional one and non-conventional lenders have a higher cost of capital (which they pass along to you in the form of higher rates).

Generally I think the way to think about it is the profit you stand to generate from this deal far outweighs your cost of short-term capital.

Best of luck with this deal and the next one(s).

Account Closed · Answer

I would call that a reasonable offer in this context.

Gary Fischer · Answer

Account Closed

Thanks for the reply....I have good credit but 6 current mortgages so it gets tough taking on new ones. Since this is a flip I guess I just have to give up a little. Rates and points are high compared to traditional but I'm over the limit on traditional mortgages

Gary Fischer · Answer

Account Closed

Well, better than 13% and have to compare closing costs

Gary Fischer · Answer

Then we're good I guess. Thanks for all the replies. Mine ends up being a good deal then. And it's true, you have to weigh it against profit and it's not that much..The price you pay not using cash :-)

Derek Walvoord · Answer

For hard money, 3 points and 13% is pretty reasonable right now.  And, they usually are about 6-9 month balloons.

Gary Fischer · Answer

guess what I am trying to clarify is 10.5% interest rate with 3 points on a 1 year term a decent offer? I have never used hard money lenders on a purchase. I have an LOC I could do it with that's at 9.99% but they hit me with 4.95% up front

Brandon Siewert · Answer

@Sam Erickson I apologize, its loanforinvestors.com

Gary Fischer · Answer

Just an update and clarification on the hard money deal I am trying to beat. 10.5% is the actual interest rate with 3 points on a 1 year term.