Rental Property Investor · CA · Member since 2018 · 12 posts · 5 votes
Hard money costs a lot for a newbie investor. I know that there’s lots of benefits like fast cash, doesn’t show on personal credit, etc. BP, if you had access to a personal revolving line of credit of 100k at 12-15%, would you still use a hard money lender that charges 2-3 points plus app fees ($750) at 10-12%?
@Darren James I would definitely use the line of credit over HML, for the above scenario. Obviously the no points and fees is a big plus. Also HML is still a loan that needs to be approved, and it can still fall through for various reasons.
Also if I used a line of credit, I would do it as a HELOC, so the rates would be at least half of what you mentioned. 15% is pretty high. 5-6% can certainly be achieved.
@Darren James I would definitely use the line of credit over HML, for the above scenario. Obviously the no points and fees is a big plus. Also HML is still a loan that needs to be approved, and it can still fall through for various reasons.
Also if I used a line of credit, I would do it as a HELOC, so the rates would be at least half of what you mentioned. 15% is pretty high. 5-6% can certainly be achieved.
Hard money costs a lot for a newbie investor. I know that there’s lots of benefits like fast cash, doesn’t show on personal credit, etc. BP, if you had access to a personal revolving line of credit of 100k at 12-15%, would you still use a hard money lender that charges 2-3 points plus app fees ($750) at 10-12%?
Yea the personal line would be much better than jumping through all of the hoops with HML.
Hard money costs a lot for a newbie investor. I know that there’s lots of benefits like fast cash, doesn’t show on personal credit, etc. BP, if you had access to a personal revolving line of credit of 100k at 12-15%, would you still use a hard money lender that charges 2-3 points plus app fees ($750) at 10-12%?
It depends. If I had one project, then the LOC. If I am looking to do several simultaneously, I'd leverage the LOC by using HM as well.