Private Lending & Conventional Mortgage Advice

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Jason Merchey
  • Investor
  • Hendersonville, NC
237
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APR vs. a Minimum Return on Private Money Loan

Jason Merchey
  • Investor
  • Hendersonville, NC
Posted Jun 15 2013, 05:54

I have just begun to look into possibly loaning money on a flip, and I am a little surprised to learn that the going rate seems to be 10-13% and that it is annualized instead of by the flip. In other words, at 10% APR, if the flip takes six months that is a 5% profit. Are private money lenders not in a position of power relative to the rehabber or something? It feels like banks offering .5% APR - they are in the position of power and if you want to store your money somewhere else besides your mattress, you accept .5%. I'm not spitting at 13% APR, I'm just saying, I thought it was pre deal not per annum.

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