Updated over 11 years ago on . Most recent reply
Hard Money
Hey guys,
So I've been approved for a hard money loan of 100% of the deal up to 70% ARV with 10% cash or collateral down. Terms are 12% interest and 50/50 profit split. This will be my first real estate deal so I'm not sure what to expect and I was hoping you guys could answer a few questions I have. I could easily call the lender with these questions, but I'd like to hear what you guys have to say first.
If I can find the right deal and keep all costs below the 70% ARV, will anything at all have to come out of my pocket? Like fronting rehab costs, closing costs, etc. I'm assuming so, please fill me in!
I don't have much cash now, and have a family member putting up the 10% collateral for me to help get me started. Is it realistic for me to think I can jump into this right now? What else should I be prepared for?
Thanks!
Most Popular Reply
Marcus,
Why are you saying that it's 100% financed if you're putting 10% down? Isn't it 90% financed?
12% interest and also a 50% profit split? And presumably he has no obligation to share in the loss if you have to sell at a loss? You have to give away something to get him to come up to 90% ARV, but in my opinion you're giving away too much.