are these loan terms bad or good?

Question

I have been recently using some private money with the terms as following:

5 Year Interest Only with ballon payment due at end of loan

No prepayment Penalties

Will Loan up to 70% of the appraised value of the home

No Credit Score Needed

12% intrest Rate

Flat 3,000 Brokerage Fee no matter how much the loan

`1,500 Attorney fee

Heres one of the deals I'm doing right now using this loan

Purchased Property for 50,000

Repair cost 10,000

ARV 110,000

Refi at 60% of 110,000

property rents for 1,100 a month

mortgage payment taxes insurance 825 monthly

275 profit monthly

Any feedback would be awesome!

Brian Smith · Answer

so you're paying 7.5% in fees alone and another 12% in interest to pull your cash back out? Doesn't make much sense to me sounds like some heavy duty leveraging that isn't really necessary. A traditional 20% down loan and 10k in renovations would put you out 25k max and you could buy another right away with the other 35k. This just sounds like a disaster in a down market. Is it a credit score issue? And are you going to use this loaned cash to make another cash purchase?

Rocky V. · Answer

It's good if you have exhausted all your other options.  I would definitely work on credit score and start stock piling cash in order to qualify for traditional bank financing.

Nigel Dixon · Answer

I'm sorry i might not have been clear...no I'm not doing a traditional refi.  I'm using my PERSONAL money to buy the property.  Then using the private money to REFi the house at 60% value to pull all the money I've invested into out.

Hope that more clear thanks

Jaysen Medhurst · Answer

So, you're using the private money to buy the property and then doing a traditional refi? You're not putting any money in?

are these loan terms bad or good?

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