Wouldn't You Rather Have Part Of Something Than All Of Nothing?

Question

It's best to have part of something than all of nothing. You can opt not to do a deal because you don’t want to pay any fees but then you have nothing. If you have a deal in which you can make a profit or expect to do so, you might incorporate the hard money lender’s fees as just another expense of the deal and still see your profits. Ultimately it’s up to you!

The definition of “expensive” is different in each investor’s mind. One investor may say a hard money loan is expensive while another investor jumps at the chance to use other people’s money (OPM) to make an investment and realizes the fee and or interest is just part of doing business. Many banks and traditional lenders do not make the types of loans a hard money lender will make so unless he or she is a cash buyer most investors are somewhat limited to the resources available for these types of investment purchases.

No one is forcing you to accept what a hard money lender is offering. You don’t have to do the deal.

For more tips on working with hard money lenders, download our free Hard Money Ebook - 19 Mistakes Investors Make in Working with Hard Money Lenders. You can find this and more HERE

Want to Learn More About Hard Money Loans?

Contact Kansas City Investor Funding LLC at jj@kcinvestorfunding.com. More information is also available on our Hard Money Loans FAQ page.

Happy Investing!

-JJ

Charles Worth · Answer

Account Closed

More expensive originating from CA or actually lending against properties in CA? Any idea why that is?

Charles Worth · Answer

Account Closed

Good point although there is a line. With points some lenders can be as high as 18% - 20% in an effective annual rate. Also, at some point the cost starts making the deal a lot more risky and the exit scenarios a lot more limited.

Would be interested to know what your typical rate and points are.

Account Closed · Answer

@Charles Worth I am seeing points in the 4-8 range and 12% annual interest. There is a wide range though, and much of it depends on where you are seeking the funding at. For example I know for a fact hard money is much less expensive in California than the Midwest.

@Mike D'Arrigo no doubt every deal has to stand on it's own and make sense.  I think the point of the article is more related to getting investors to think outside the box when it comes to finding financing options for their investments.

Thanks!

Mike D'Arrigo · Answer

It all depends on how much the "part of something" is and the level of risk.