Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
16y
Chris,
You asked about private money lenders and not hard money lenders. All the answers you received are about hard money loans.
I rarely pay points on private money loans. Most deals get 10% or 12% interest based on the loan amount.
So in your example of a $100k loan, at 12% interest, yes, you would owe $1k a month. Typically, I have the loan contract to pay the principle and interest in one balloon payment, and not monthly interest payments, so at the end of the term, say 6 months on flips, I would pay the private investor $106k
For holds, I would structure the interest payments monthly.
Financial Advisor · Tampa Area, FL · Member since 2008 · 956 posts · 214 votes
16y
Originally posted by Financexaminer:
Originally posted by Josh Green:
FWIW, the guy answered the phone with the name of a mortgage company. so it appears that he would be exempt.
Josh, you tricked me! LOL You know that stuff gets me going, lol, I just hope you find some real private lenders you can do business with. Good Luck, Bill
I walk a fine line in my job. I am a banker and deal with people that are complaining about their cd/mm/savings rates all day long. however, i am not allowed (company policy as well as a finra violation) to discuss anything other than bank/investment products with them. it's tough!
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
16y
Yes Josh, you're in a tough spot sometimes, holding to your responsibilities to the best interest of the bank. If your bank has a trust department, someone over there might be able to assist you in considering options for your customers. Good luck with that...Bill
Financial Advisor · Tampa Area, FL · Member since 2008 · 956 posts · 214 votes
16y
Originally posted by Financexaminer:
Yes Josh, you're in a tough spot sometimes, holding to your responsibilities to the best interest of the bank. If your bank has a trust department, someone over there might be able to assist you in considering options for your customers. Good luck with that...Bill
i would like for their options to be a PML to me :lol:
Real Estate Investor · Hampton Roads, VA · Member since 2011 · 1 post · 0 votes
14y
So, is it possible to decrease an interest rate you agreed on with a PML? I feel so stupid, we've agreed to pay 15% and we are veteran home builders getting into the market again with foreclosures. How can we renegotiate?
Note Investor · Pasadena, CA · Member since 2009 · 849 posts · 544 votes
14y
You could, but at the risk of losing that PML.
If anything, take your lumps on this deal, as you did agree to those terms, and when you go to your PML for the next deal, negotiate better terms (for yourself).