Vetting a hard money lender

[Daniel Kern]

Hello. I found a property I'm interested in making an offer on and using the BRRRR method. List price is 119k but I think I can get it for around 100k with an ARV closer to 165k. I currently have 6 properties and am trying to be out of pocket as little as possible I reached out to a hard money lender and here are the proposed terms. I've never gone with hard money before and am wondering if these terms are typical or for any advice BP people have...

 “we offer 80-90% of the purchase price and 100% of the rehab. Our rates are annually, meaning , you pay monthly only on the loan amount & the notes are 12 months, with No prepayment penalties and no Minimum interest, were your locked into the loan .Banks have no programs for investors of this high leverage on purchase and full rehab , interest only.

So the 9% annually equates to .75% per month, which is cheap, cost effective. . Its about what , the product can do for you as an investor, not what it costs, which is leverage, Higher Roi, low risk., diversification .

As far the origination fee, lenders like to clear a minimum of 3500.00 on small balance loans under 150k, so the 3.5% is more then fair”

Other than his grammar, thoughts?

[Shaun Ashkenazy]

This is pretty standard, however if you have completed an "exit" on those 6 properties (refinanced/sold), you may be able to find a lender that will give you better rates.