Updated over 7 years ago on . Most recent reply
Hard money loan to the agent?
Hi BP members! Good morning!
I have an real estate agent who wants hard money loan from me for flipping an income unit. The investor is putting down 25% of the purchase price, and extra 20% in renovation. I'll be loaning 80% of the purchase price and I'll get is 10% interest for about 6~8 months. Is it relatively safe? Is there anything that I should be aware of and be cautious of? Thank you so much for your comments in advance!
Most Popular Reply
What is the ARV? If the investor/Realtor is flipping it, what are they expecting it to sell for to the end Buyer?
You have to know the deal before you can make an informed decision.
Otherwise, if you are coming in with 80% LTC (loan to cost/purchase price) and the Realtor/investor is coming up with 20-25% PLUS another 20% for the rehab, then the Realtor/investor is coming in with skin in the game too. So, in that regard, it could be a potentially good deal at 10% interest for a short term loan.
You have to know the deal first....not just the numbers on paper. Ask the agent for the ARV figures and comps that support the ARV number.