Hard money advice - help me not be stupid
I’m going to be shopping for a hard money loan for an upcoming duplex acquisition and rehab.
1. What are red flags that would signal ‘this is a terrible deal/rate/terms/they are crooks’? What should I avoid?
2. What are signs of a good deal/rate/terms that I should seriously consider? What’s acceptable?
3. What would tell me ‘this is an amazing deal/rate/terms and I should sign right now?’ What would be a slam dunk no brainer?
Examples of deals you’ve done are much appreciated for case study 📚 comparisons. Thanks!
Most Popular Reply
Best option would be for a No prepayment penalty or the option to pay it off on a reduced sliding scale. Meaning if the pre-pay is 2% of (x) use $200K as an example you have the option for a reduced pay usually for the first, second and third year. So First year $4K 2nd year $2K 3rd Year $1000. Every hard money lender is different but I would check rates and see if a 3/1 ARM or a 5/1 ARM has better pricing and try and evaluate how many points and what are the hard costs.
There are no good deals when your going hard money, its what results is the ROI.