Hard Money

9 Replies

I am new to Bigger Pockets but have invested in real estate in the past. We always did owner financing. I am a real estate broker of 10 years and my husband is a retired GC. We came across a deal we cannot pass up here in south Florida. We are looking for a hard money loan for 85K. The purchase price is $105,000. We have done the numbers the ARV is $175k -$220K if done high end. I need help! How does this work? What should we expect to pay worst case? I'm in West Palm Beach Fl.

Lots of Hard Money guys want lots of points and a high interest rate.  

I have seen hard money lenders ask for as many as 10 points and as much as 15%

There are several investors that post on here.  I would imagine you will hear from a few, if not search the forums and you will find some posts here.

You could also do a joint venture if you think the deal is sweet enough, have them put up the money, and you do all the work.

"Hard money" can be as inexpensive as 6.75% and 2 points.  It depends on your experience.  Document your track record.  Your financing costs will decline as you gain experience (and wisdom).

Bill 

Originally posted by @William Cavalier :

"Hard money" can be as inexpensive as 6.75% and 2 points.  It depends on your experience.  Document your track record.  Your financing costs will decline as you gain experience (and wisdom).

Bill 

 Bill makes a great point!

Hard money rates are regional.  To find out what they are in your area, call hard money lenders in your area, not the national companies.  National hard money has to depend on appraisals and usually have set rates.  Local lenders form their own determination of value, and will have their own rates that they want to earn.

To find local lenders, look on

1.  BP's hard money directory

2.  Go to local REIAs and ask around

3.  American Association of Private Lenders (google it)

4.  Scotsman Guide

5.  There are other directories, but start with the above

I am new to Bigger Pockets but have invested in real estate in the past. We always did owner financing. I am a real estate broker of 10 years and my husband is a retired GC. We came across a deal we cannot pass up here in south Florida. We are looking for a hard money loan for 85K. The purchase price is $105,000. We have done the numbers the ARV is $175k -$220K if done high end. I need help! How does this work? What should we expect to pay worst case? I'm in West Palm Beach Fl.

Owner financing is always the best option. Here is an idea for you, let the owner know you expect to make a reasonable profit, ask seller to joint venture with you; they commit to a hybrid contract with you, they put up the property, have a delayed settlement and offer them a percent of the net profit you make upon resale. Take the $ you have for the DP and use it to improve the property, offer it for sale as a reserve auction.

Take your rewards, seller makes more and you leveraged your way into some cash flow.  

Charles

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