Is a 6 month loan term too short?

3 Replies

Some of the best interest rates and fees that I have found with hard money loans only have a 6 month loan term. Is this enough time for a beginner fix and flipper? 

Hi @Keishee Hill ,

Every deal is different. Some flips take 2 months some take 20 months! I say on average we see pay offs within 4-6 months. You're right, we like many other HMLs charge less points for a 6 month term vs a 12 month term. If  you are pretty confident you can finish within 4-6 months after your contractor has committed to an estimate and you've studied the market time, your best bet would be to get a 6 month note with No PrePayment Penalty and also make sure Extensions are available.

Good luck!


That would mostly depend on your scope of work (carpet and paint, or full rehab?) and how fast things are selling in your market.

of course, there are other possible issues that can creep in - I saw an article today about huge permitting delays (a couple months in some cases!) in my local area due to a flood of requests and complications from a new computer system at the permit office

Keishee Hill there are two rules of rehabbing, double the budget and double the timeline, especially if you're a beginner. What happens if a contractor screws you and doesn't show up to the job. You don't want to be pressed for time to get it finished and sold. Just food for thought :)

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