Can Someone Explain Hard Money

Question

Hey

I'm still very new to Hard money lending and I was wondering if anyone can explain to me exactly all the details of hard money lending, when and how to use it, and what is essential for me to know when using it.

Any help will be appreciated

Cornelis

John Cameron · Answer

Hard money is secured by a "hard" asset.  It's easy to get.  Ironic.

Usually 2% origination, 12% per annum, paid in interest only payments at 1%/month.  You borrow $200K you pay $2000/month shorter term usually 4-6 month.  Hard Money Lender = HML if you see that around.

Rates and fees vary of course and they go down as well as LTV as your experience and relationship with the hard money grows.

Brent Coombs · Answer

@Ruan De Nysschen, "hard" means that you have tried to get an "easy" loan at a low interest rate - and failed! So, you have to climb the same investing mountain at a steeper interest slope.

The ONLY time to do that is if the deal at hand is STILL worth going for, despite the "hard" climb!

Colleen Bigler · Answer

Ruan

Hard Money was coined originally from- hard coins...

I have been in Hard Money in Ca. since the 80's and there are now Hard Money lenders and Funds with their own underwriting criteria similar to the secondary market.

Traditional hard money is with local private investors who lend through a broker. The underwriting should be 99% based on the equity in the property. LTV are lower for security ,as credit is not part of the decision making, all equity based. Processing for traditional Hard Money is very easy and fast. The rates vary with the individual investor, property, LTV  and location. It is a match game investor want to borrower wants.

Most Hard Money Lenders write short term. I prefer to write 3-5 year loans in case of hick-ups along the way. If your exit isn't solid you may have to get another loan and pay points and costs all over again. So for sake of speed, or you just dont qualify for a bank loan, Hard Money is a choice.

Can Someone Explain Hard Money

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