hard money
- Thread starter mikeberg
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Hard money typically consists of high interest, high fees, short term private money.
Hard money can be used effectively in certain situations where traditional lenders are unavailable, but the deal has to be pretty sweet to make it work. One example would be an emergency closing while you line up a JV partner.
Expect to pay 15-20% interest (or more) plus 2%+ in lending fees.
Hope this helps
Hard money can be used effectively in certain situations where traditional lenders are unavailable, but the deal has to be pretty sweet to make it work. One example would be an emergency closing while you line up a JV partner.
Expect to pay 15-20% interest (or more) plus 2%+ in lending fees.
Hope this helps
- Joined
- Oct 24, 2007
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We have used it before for bridge financing or when flipping houses.
Generally speaking the lenders qualify the deal not you but it`s basically financing at credit card rates.
If you think you will need hard money for longer than 90 days - 120 max, then you need to seriously examine the fundamentals of your deal.
QUOTE (mikeberg @ Apr 23 2008, 12:51 AM) Hello,
Has anyone ever heard of hard money, if so would it be a good idea to use that type of money for short term?
Thanks
Generally speaking the lenders qualify the deal not you but it`s basically financing at credit card rates.
If you think you will need hard money for longer than 90 days - 120 max, then you need to seriously examine the fundamentals of your deal.
QUOTE (mikeberg @ Apr 23 2008, 12:51 AM) Hello,
Has anyone ever heard of hard money, if so would it be a good idea to use that type of money for short term?
Thanks
- Joined
- Sep 11, 2007
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- 462
QUOTE (mikeberg @ Apr 23 2008, 12:51 AM) Hello,
Has anyone ever heard of hard money, if so would it be a good idea to use that type of money for short term?
Thanks
Hard money has its place, but it is short term money. Most private lenders will want to know your exit strategy (ie when they are getting their money back). If you are considering private money because you can`t qualify with a conventional lender - try the alternative lenders first. They are more expensive than an A lender, but cheaper than private money - and lend for longer terms.
Has anyone ever heard of hard money, if so would it be a good idea to use that type of money for short term?
Thanks
Hard money has its place, but it is short term money. Most private lenders will want to know your exit strategy (ie when they are getting their money back). If you are considering private money because you can`t qualify with a conventional lender - try the alternative lenders first. They are more expensive than an A lender, but cheaper than private money - and lend for longer terms.
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- Aug 30, 2007
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- 124
QUOTE (C2Ventures @ Apr 23 2008, 12:00 AM) Hard money typically consists of high interest, high fees, short term private money.
Hard money can be used effectively in certain situations where traditional lenders are unavailable, but the deal has to be pretty sweet to make it work. One example would be an emergency closing while you line up a JV partner.
Expect to pay 15-20% interest (or more) plus 2%+ in lending fees.
Hope this helps
If you do go this way really watch the fees as well, many of the private lenders have increased their fees substantially. You may end up with a short term loan of only 12%, but the fees can make the effective rate closer to 30%. Also be very cautious about any payout penalties buried in the loan. If the loan is for six months and you can pay it out in four you might be better off just making the payments for two additional months.
Hard money is not for the faint of heart, but with proper diligence and the correct situation it can work for you.
Hard money can be used effectively in certain situations where traditional lenders are unavailable, but the deal has to be pretty sweet to make it work. One example would be an emergency closing while you line up a JV partner.
Expect to pay 15-20% interest (or more) plus 2%+ in lending fees.
Hope this helps
If you do go this way really watch the fees as well, many of the private lenders have increased their fees substantially. You may end up with a short term loan of only 12%, but the fees can make the effective rate closer to 30%. Also be very cautious about any payout penalties buried in the loan. If the loan is for six months and you can pay it out in four you might be better off just making the payments for two additional months.
Hard money is not for the faint of heart, but with proper diligence and the correct situation it can work for you.