Residential Real Estate Agent · San Diego, CA · Member since 2011 · 29 posts · 2 votes
Hello,
I have a investor who says it is ridiculous to pay 12% interest on a hard money loan. I tried to explain to them that leveraging your funds is a great way to protect yourself from further risk and that using hard money loans will allow you to do multiple deals at the same time- not putting all your eggs in one basket. So I am wondering how do you feel about using a hard money loan? Do you prefer it for the reasons I stated above or is a maximum profit your number one goal? I appreciate the discussion.
I find them impractical for buy & hold properties. The terms are usually too short.
I agree with Mitch. I think it's very important to have some sort of permanent financing in place before using HML, because a HML can get very expensive very fast if you don't have permanent financing in place for the long term.
Chis G- In Cali you can lend up to 10% per annum as an individual. To go higher you will need a lenders license or a brokers license. You can go through the dept of corp or the DRE. This will only allow you to lend in Cali. Each state will have it's own laws regarding lending.