Hey @Steve Powers
What Market are you in? I am in NJ and 15% sounds a little high but 3 points is pretty fair, especially if you are new to investing in flipping homes.
Every lender is different. Also, if it is private money vs hard money. They are essentially the same thing, but private money may be more flexible on terms. Hard Money you will typically always pay 1 - 5 points at closing, most common being 2 - 4.
As far as rate, any where from 8% - 18%. And that is not the rule, it could be higher although I don't know who would agree to that. Maybe some one in a pinch.
If you have a lot of experience there are rates out there as low as 8%. For some one brand new they might be paying 12% or higher. But given the fact there are a good amount of lenders out there willing to do 12% for newer investors, 15% sounds a little on the high end.
Depends a bit on the price points too (i.e. under $100k gets more expensive), but typically I see newer investors nationwide getting around 12% and 3pts for a 90% LTC (purchase + rehab) loan for 1 year.
It definitely depends on your location and your experience. The hard money lender I work with is 8.5-11% and no points but I know other HML in the NJ area are also around 10-12% on average and do charge points. It also varies based on the different types of programs they offer! I would suggest definitely looking into different HML to find your best deal for your project. Good luck!
@Steve Powers Steve, 2% origination and 10%-12% is absolutely available in the Nashville market. That would cover 80%-85% of the purchase price and 80%-90%of the rehab. Total loan not to exceed 70% of the ARV.
Originally posted by @Steve Powers :
New to hard money lending... is 15% and 3 points a good deal? Or average? Or bad?
Hey Steve, 2pts + 9-11% is the reasonable private money term in the Tennessee market. (80% LTV on acquisition + 90-100% rehab)
15% is way too high. Let me know if I can provide any info on lenders who charge less than this.
@Ann Rosen could you provide the info to lenders who charge less please
@Steve Powers Sounds a little steep, but for a beginner I'm not surprised.
Changes from place to place but just starting out, you will have tougher rates for financing.