Here's my "take" on the market - and my question: Will hard money continue to get cheaper? We see a continual pattern of huge amounts trust deed investment dollars chasing a smaller number of loans. Rates in the single digits, costs near as low as what banks charged, and longer term loans. The old "Limbo Dance" comes to mind: "How low can you go?" (If you're too young to remember that, it's probably a good thing.) Real Estate investors who bought when prices were much lower, (about 18 months ago here in Southern California) are selling/taking profits. Some of that money is chasing trust deed investments as well - driving rates and costs even lower. Investment property buyers who can't or don't have 3 months to jump through the bank's hoops to try to get their loan are taking advantage of today's lower costs from hard money lenders. People using hard money loans for investment properties are sharp - we've got to have terms that make ssnse. So my big question(s): Do you see an increase in any of the following? Hard money loans offered at single digit rates, longer terms and lower costs? Trust deed investments offered at lower yields? Or an increase in the use of hard money financing for investment purposes? (I'm only talking about NON-OWNER occupied properties, not financing someone's residence.) Look forward to your feedback! Joffrey Long P.S. When hearing the mention of "hard money," some feel compelled to mention "loan to own," where a lender merely loans with the hope of foreclosing. Wrong-O ! That's a pretty "1980's" business model - but especially dangerous with 2013's new investor and borrower protection laws.

Hi, Im a green Noob, looking to get started rehabbing / flipping in Southern California. I want to know what I need to get a hard money loan. What documents, etc. ? This forum is very advanced, but I cant find the info Im looking for. I have a 401K ( not huge ), equity in my house, a couple bank accounts, great credit, Im a Licensed Electrician with lots of construction experience. Im reading a lot and a bit overwhelmed, Ive found the Norris Group online, but Im not sure where to begin. Im mainly interested in buying and holding, but will do whatever it takes to get started. I could use a mentor or a partner or any advice you may have. Thanks

I am amazed at how high the rates are in FL. In Los Angeles I have a hard time getting more than 10% lately. Am funding a commercial prop now, 50% LTV, at 10% and no points, and borrower keeps haggling with me :-) Amir

Joffrey Long From Joffrey: Here's my "take" on the market - and my question: Will hard money continue to get cheaper? We see a continual pattern of huge amounts trust deed investment dollars chasing a smaller number of loans. Comment from Hans: I am seeing that also- but not reliable source of funds to close quick and aggressive. Rates in the single digits, costs near as low as what banks charged, and longer term loans. The old "Limbo Dance" comes to mind: "How low can you go?" (If you're too young to remember that, it's probably a good thing.) Comment from Hans: We are not seeing single digits here in Fla yet but there are private small time investors, (aunt Mildred types), coming into the market at 10% no points or low points- however, they are slow, require too much stuff, cant close and are not aggressive enough. Nevertheless, they are hurting us at our 12.5% to 13.5% loans starting at 4 points because, even though they cannot close near as aggressively, they poison the well for our higher costs if you know what I mean. We are closing deals every week starting at 12.75% to 13.5% and starting at 4 points for 3 to 5 years. But we have several brokers bringing us deals for people who really need to close fast and may have some problems. They know we can do it and sell our higher rates. And, we are extremely aggressive in getting it closed, no application fees, we do our own CMA and require no appraisal, no credit, no pre-payment penalty, no escrow of taxes, no upfront fees, we will do construction draws on a weekly basis and are not afraid of rough property. And, most importantly, we can also close tomorrow!!! Example- closed a deal today for a first time borrower for us- he had better rates from a small private lender but stood there and told us the small lender was too slow- does not return calls, etc. We got the loan, $125K, 13%, 5 points- (part of that was to the broker who brought us the deal), and no pre-pay penalty. We inspected the property on Monday and we closed today- that is less than 3 days. The guy is now bringing us all his deals. These people need to close so what is a couple points in the interest rate if they cannot close. We do not have a hard time placing our money but are always looking for deals. We also closed a $150K at 13% and 4.5% points for 5 years. Year to date we have closed over $3 million- I wish it were more- but have not had to go down yet.

K. Marie Poe- we offer 10% w/ backed by an assignment in the note and mortgage on South Fla real estate and a personal guaranty! Let me know if you have any interest. Sorry if that broke rules- but truly think it is education and germane to the discussion.

Hard Money Loans: California Investors?

Gene HackerPro Member

Flipper/Rehabber · Lake Isabella, CA · Member since 2011 · 969 posts · 488 votes

13y

Longer terms are likely be adopted by more lenders. A few are starting to recognize that many buy and hold investors are unable to qualify for longer term loans on properties/deals that make since even with higher loan rates. And investor/lenders are happy making a bit less without the turn over. If your making 15% but your money is only allocated 50% of the time...you really are not doing very well compared to lower rate long term loans.

Hard Money Loans: California Investors?

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