Hard Money Loans for Rental Property

[Shakir Evans]

Can someone explain how hard money loans work when using the loan to buy rental properties. Let’s say you buy a $100,000 property and your interest is 10%. What are you paying per month until you can refinance?

[Account Closed]

@Shakir Evans, there are two types of hard money loan. One is the for short-term like fix and flip, bridge loan. You pay interest only during the loan period and pay off the total loan amount at the end. Say $100k loan 10% interest for 1 year interest only payment option, you pay $10k/12 = $833 interest each month, at the end you pay $100k. Second type is long-term loan like 30-year fixed for stabilized rental property. This requires the property to be in livable condition and a tenant in place. The rent income should be able to cover the expenses and also service the loan. The rate is around 5.5% now and payment is P&I equal payment. Hope this helps you.