Opinion on these Hard Money Terms

3 Replies

Hey there everyone, looking for some opinions on these terms for a hard money loan. First time using hard money and I'm looking at this lender as one of the options for this potential BRRR

Brief numbers on my deal 

150k purchase price for hard money 

40k owner carryback 

100k rehab

ARV 370k

Minimum purchase price: $63,000 (if 0 experiences in last 3 years)
Minimum purchase price: $59,000 (if 3+ experiences in last 3 years)
Minimum ARV: $75,000
Minimum loan amount: $50,000
Appraisal Fee: $550-$725
Closing, Legal Fee: $995 - $1,500
Interest Rate: 7.99 - 10.99%*
Origination Fee: 2.00 - 4.00% **
Loan Amount: 80-90% of purchase price + 100% rehab costs
Term: 12 months, interest-only

* Rates based on investor experience, 24 flips last 3 years = 7.99%, 0 flips = 11.99%
** Based on loan size and risk profile

The terms of the loan look okay.  I'm curious how long you estimated for the carrying costs?  I think some investors get in trouble with underestimating how long it will take to sell the asset.  If the end buyer is a home-buyer remember to factor in extra time AFTER construction for marketing, etc.  That will shrink your margin a little but it looks like your numbers still work.  Congrats on the deal!

those are basic rates for the national or semi national lenders. keep in mind there will be a few grand usually in junk fee's as well as the points then the normal title and escrow fees