Questions about getting Hard Money from friends
Hi everyone,
Looking to get some duplexes with friends' money and make them some money in the process. I already have the friends and I've started looking at properties. I have an agent, lender, CPA, etc.
Questions are:
- What is a reasonable time for returning the loan? 1 year?
- What is a reasonable interest now that interests are wild? 10%?
- What is the paperwork necessary or what options do I have to make the loan official? I do trust my friend very much, but I want to be safe.
- Outside of piling up on properties and then risking some being vacant or rents going down, etc. What are the risks of this strategy if done safely and slowly?
Most Popular Reply
Hey Pablo,
Hard Money loans are typically 6-12 months long. 10-12% rate depending on how experienced you are. If you are using your friends' money and not an established HM lender, they should file a lien on the property for the amount they provide you. You should work with a lawyer to have the lien filed, a promissory note drawn up, and any other necessary legal documentation.