Help Understanding Hard Money Lender's Terms

[Casey Melucci]

Hello,

I am in the process of securing my first hard money loan. The deal involves buying an existing single-family house for $700k that conveys with a vacant lot. The vacant lot, if buildable, is worth about $150k. I believe the house would resell for $650k, so $650k + $150k = $800k deal value minus $700k purchase leaves about $100k profit in the deal. I only have $50k to put down on the deal.

The lender is stating the following: "we would require a mortgage on the lot in the amount of $90,000.00 when combined with your $50,000.00 deposit would be $140,000.00 down payment apx a 20 percent down payment"

Is he saying I need to find another $90,000, or that he will act as the mortgagee on that portion as well? Logic tells me he wants me to come up with the additional $90k, but not 100% sure.

Any input is appreciated! 

[Mike Klarman]

You can't afford the deal.  Not only can you not afford the money in, but how will you pay a 560k mortgage?