Save 1,000's On Your Next Fix & Flip With Just One Little Secret!
As investors you work hard for your money and that is why you should keep more of it. Everybody knows that when you get a hard money loan you pay full boat interest regardless of how many construction draws you have taken! By tweaking just one little aspect of your financing plan you can save thousands if not tens of thousands, depending on the size of the project, by finding a lender that only charges you interest on the money you have used not the entire loan amount from the time of settlement.
Example:
Purchase $150,000 + Rehab $100,000 +Total Loan Amount: $250,000
Rate: 12 %
Month One Payment With Total Interest On Loan Being Charged: $2,500.00
($250,000 X 12% = $30,000/ 12 = $2,500.00)
Using the same scenario and assuming you used $25,000 of your construction reserves in the first month your first months payment would be cut in half saving you $1,250 on your first payment alone!
Month One Payment on only the money you have drawn down: $1,250.00
($125,000 X 12%= $15,000/12 = $1,250)
Imagine increasing your profit 20 to 30% on each deal with one simple move. I see it happen every day and it makes my clients smile :-)
So ask your Hard Money Lender if they charge interest on only the money drawn or total loan amount from settlement. If your caught in the wrong lending program give me a call so I can show you how to save 1,000's on your next deal! I look forward to working with you.
Cheers!