Hard Money Lending

[Tony Kogan]

Hi BP community,

I have interest in hard money lending, however I am new to it. I have the following questions: 1) how much money do you need to have in order to become hard money lender 2) how do you find your clients 3) what is the term for the loan 4) what are the drawbacks of being a hard money lender . Any input is welcome. Thank you.

[Jay Hinrichs]

Tony  great questions.

here is my take on it. if is your own capital then 5 million in my mind is about the amount you need to start... at a 14 to 15k apr your making 600k a year.. which is average income for a HML or maybe a little low.

If you can leverage up then 20 to 50 million is a nice business you will make about 1 to 2 million a year if you won the company.

it sounds like you have zero experience so HML is probably far to risky .

what I would do if I was you if you have a million or two .. use an established HML to place loans for you in their network and shadow it learn what they know and how they vette then after a few years go on your own.

HML at the 100 to 200k range as an example is a waste of time not enough money in it at least for a business to eat off of.