Jupiter, FL · Member since 2016 · 10 posts · 4 votes
If I were to borrow about 30k for a 45k SFH that I plan to BRRRR in Detroit. I have excellent credit, with plenty in the bank to cover it were something to go wrong.
A friend of a friend said he wanted 2 pts and 12%. That seemed pretty steep to me. I'm a first time investor though, so I can understand a slight premium to standard rates for more experienced investors.
I sat with a HML recently and where I'm at, it's 10% interest with 2% points paid at closing. On $100,000 it's $875 per month interest only payments and the points equal to $31 per day. No credit check.
Real Estate Broker · Farmington Hills, MI · Member since 2019 · 44 posts · 16 votes
6y
That's honestly pretty reasonable. I've seen anywhere from 2-6pts and 8-20% interest rates on hard money loans here. If you have rapport or the ability to build a relationship with them, generally your terms will improve over time.
Just make sure to be calculated on your flip repairs and time frame whenever using hard money since unexpected rehab issues and delays are more costly.
I sat with a HML recently and where I'm at, it's 10% interest with 2% points paid at closing. On $100,000 it's $875 per month interest only payments and the points equal to $31 per day. No credit check.
Specialist · Delran, NJ · Member since 2016 · 2k+ posts · 951 votes
6y
Just for perspective a lot of hard money lenders or lenders in general won't even do a loan that small. I'm actually surprised they'd do that for only 2 points. Typically the smaller the deal the points go up which on paper sounds rough, but if you do the math even at 6 points you aren't actually talking a lot of money.
Realtor · Tucson, AZ · Member since 2018 · 23 posts · 5 votes
6y
If you want some local hard money lender insight see if you can stop by your local REIA meetup. I looked up Jupiter, FL and there appears to be several nearby that might be worth a visit.