Are hard money leders the same for newbies?

Question

I have no deals under my belt, will most likely have to go hard money.  I have had some people send me their terms, they are almost all the same.  Is this the case for all hard money lenders?

Christi Hawkins · Answer

@Ben Smedstad   yep, for newbies it's almost always the same but as @Antoine Martel said once you develop a relationship with a lender and prove you can do this the rates will get better. Make sure you find one with whom you're comfortable and will partner with you throughout the rehab. You're going to need that guidance for your first few deals, so make sure  whichever lender you choose offers that as well. You don't want to be out there all alone doing this for the first time, you'll need some support

Antoine Martel · Answer

Yes most hard money lenders will charge you a few points and then 12% interest.

If you're brand new then of course you're going to be charged the most.

As you get some deals under your belt then that number will go down and down.

Ben Smedstad · Answer

Thanks for responding Christi.  Since they are the pretty much the same it makes it clear what to look for, professional and helpful.  We already have an experience gap lender, so we are very lucky in that department, but the more help the merrier, things are coming together nicely.  Have a great day.

John W. · Answer

Yes, they will be happy to take your money

Evan Battaglia · Answer

A line of credit is important, when you find your investment property the loan can close as soon as appraisal is completed. The purchase can also be financed if you need to urgently purchase a property with cash at auction. Focus on a scope of work for a general project, this will be required for underwriting. Don't be afraid of a slightly higher rate, if planned correctly the difference should only be a small margin of your potential profit. I work with first time investors often, if you have any specific concerns.

Ben Smedstad · Answer

Thanks for the reply Evan, I understand building a relationship and most I have seen are 2 points.  Not interested in a partner though.

Evan Battaglia · Answer

I have seen Rates start at 6.99%, but require multiple flips to secure best rates. Either way if someone is charging more than two pts you may want to do more research. Have you tried looking for a partner with at least five flips in last two years?

Ben Smedstad · Answer

Thanks a bunch Antoine, it's kinda funny the website advertise all rates over other place, which I understand, it's the clickbait generation.  Seems when it comes down to it they are not much different.  Probably just do a bit of research and make sure they don't have a bad rep.

Thanks again for the confirmation.

Are hard money leders the same for newbies?

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