Hard Money Rates in Today's Market

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Hard Money Rates in Today's Market

Bailey Coleman
Investor · Member since 2022 · 65 posts · 38 votes

What are rates looking like for a typically hard money loan today? 10-15% ????   How many points are they usually charging too? When I underwrite properties I have been assuming they are charging 15% for the hard money loan. So I use that number in my calculations 

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Owen DashnerPro Member
Lender · Omaha, NE · Member since 2008 · 1k+ posts · 1k+ votes
3y

Rates can vary widely. 100% of purchase, 0 points, and 19% interest is normal in my area.  2 points and 13% is normal in surrounding areas in the midwest.  You have to look at what your blended rate is when adding in the points. You might be better off paying a higher rate with less points on a really short holding time, and vice versa.

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  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    I am getting 11% 3 points

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  • Dwayne GhantPro Member
    Investor · Member since 2022 · 53 posts · 23 votes
    3y

    @elliot is this rate available in taxes only??

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  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    3y
    Quote from @Bailey Coleman:

    What are rates looking like for a typically hard money loan today? 10-15% ????   How many points are they usually charging too? When I underwrite properties I have been assuming they are charging 15% for the hard money loan. So I use that number in my calculations 


     Hard Money lenders vary wildly since its not a standardized agency or typically securitized product - but the most competitive lenders are still in the single-digit range for experienced borrowers

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  • Owen DashnerPro Member
    Lender · Omaha, NE · Member since 2008 · 1k+ posts · 1k+ votes
    3y

    Rates can vary widely. 100% of purchase, 0 points, and 19% interest is normal in my area.  2 points and 13% is normal in surrounding areas in the midwest.  You have to look at what your blended rate is when adding in the points. You might be better off paying a higher rate with less points on a really short holding time, and vice versa.

    1Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    3y
    Quote from @Bailey Coleman:

    What are rates looking like for a typically hard money loan today? 10-15% ????   How many points are they usually charging too? When I underwrite properties I have been assuming they are charging 15% for the hard money loan. So I use that number in my calculations 


     Depends on the purchase price and loan amount. 

    I am seeing rates as low as 9.5% and points at 3%

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  • Issac San Miguel
    Lender · Austin Texas · Member since 2022 · 319 posts · 156 votes
    3y

    Yikes - 8.99 and 3 or 9.99 and 2 is what I am seeing.  I have also seen 12.99 and no points.

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  • Givo Aghasi
    Lender · Los Angeles, CA · Member since 2022 · 238 posts · 73 votes
    3y

    I'm seeing 10%-12% depending on fico and loan amount. 

    1Reply
  • Mike Klarman
    Specialist · NJ · Member since 2022 · 1k+ posts · 656 votes
    3y

    Bailey, right now the answer is it varies.  For fix and flip loans, if you are in bucket 1 (0 properties exp) then expect to have a rate of 12.5% - 13%.  I have run into lenders that asked for 15%.  Don't ever do a loan for 15%.  There's better.

    Bucket 2 (1, 2 exp) expect to pay 11.5% - 12%

    Bucket 3 (3 - 9) - this bucket things start loosening.  9.99% - 10.75%

    Bucket 4 (10 - 29) - 9.99% as long as the credit is good but 90% leverage.

    Bucket 5 ( 30+) 9% and 100% financing if credit qualifies.

    Points expect anywhere between 2 - 4 honestly.  You may be finding a lender through a broker with a lender sounding name and he/she has a white label deal with a big lender to sell their products with an up charge for them.  Now, some people are greedy.  They may have a 1 point deal with the lender but charge you 4 points and put three points in their pocket.  2 points is the least you'll pay.  I know some lenders who do charge 3 but they offer perks in the loan for the extra point like: no appraisal, a one week close, or rolling all payments into the back to be settled at the refi/sale transaction.

    Anybody who ever wants to reach out to me and talk about the process feel free.  I've held three different positions at a lender and have seen the process from a a few different perspectives.

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  • Michael Kinsella
    Lender · Member since 2018 · 617 posts · 275 votes
    3y

    Interest rates will generally vary based on factors such as experience and FICO score, but a reasonable rough estimate is,

    9.99%-12.99%.

    1-3 pts.

    As mentioned by several posters above, there is variation, and if you have ample experience, you may still be able to obtain more competitive terms.

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  • Jon Puente
    Lender · Charlotte, NC · Member since 2020 · 224 posts · 221 votes
    3y

    Hey Bailey, 

    It depends on credit, reserves, how much experience you have, and LTV/ARV. I am seeing anywhere from 10.25% to 14.25% dependent on experience. The upfront cost can vary anywhere from 1 point to 4 points. You are not too far off your calculations, but for an experienced investor with the best credentials mentioned above, you should definitely be close to 10% - 11%.

    Great Question! 

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