Hard money lending

[Jay Sechowicz]

Hello all,

I am looking to find my second property and am thinking about the possibility of going with a hard money lender. I just don't know much about how it works. I've read articles and what not but have not really actually talked to people that know what they're doing about it. It seems like it could potentially be pretty risky. Also, do hard money lenders have certain criteria The property must meet?  What are usually the loan terms? Are there better situations than other to use/not use this strategy?  I'll take all the advice and insight I can get.

Thanks a lot,

Jay 

[Domenic Marchetti]

@Jason Hirko - It is a short sale in RI. 2 bedroom bungalow with only 525 living space and 1300 lot size. Roof is only 3 years old, windows 4 years old, and vinyl siding 5 years old. The property has been on the market for about 2 months with 2 price drops by the bank (negotiator in place and eager to sell). 

Selling Price: Around $49,000 (nothing in contract yet)

ARV: Approx $80,000 (based on comps and 2 seperate BPO's)

Tax Assessment: $67,000

I am getting a 12% rate, interest only payments (minimum of 1 year interest to be paid).

My GC is going through the house tonight and I have an appraiser going in next week. Hoping to submit a hard offer by Friday of next week.