Hard Money Lenders Rates?
I talked with a loan officer today regarding a loan guarantee for rehab projects. He quoted me 15% and 5 points...6 month note with option to extend 6 more. No payments for first six months. Sounds like a lot to me. Is this standard for the industry?
Check the Lenders Tab. Sounds pretty standard to me.
Yeah, probably about the average. You can get fewer points with higher rate, or different variations. Then they look at the LTV which they often want to be70% or less. Some also want some money out of your pocket as down regardless of LTV to show good faith, esp with the rehab factor. But sometimes it's worth it to get the smokin' deal.
Unfortunately - Yes, this is about the norm. However, if the first couple deals go well with this HML, I'd try to negotiate a break with the points for future deals. Better yet, find private investors that are interested in making around 15% ROI and structure a deal with them. There's an article about it called "Creating Private Lenders". Check it out!
Good Luck!
Ginger
Would the LTV be based on FMV or purchase price? I read where they would hold difference in Escrow and release small abouts as repairs where shown to be complete.
I then talked to a local Broker and she said that not only is Hard money in short demand but the LTV was calculated from the purchase price.
Thanks for the replys.
The loan officer stated that after two deals, they would lower both the points and the APR.
And yes, there is a down payment. This is necessary evil for doing this type of investment, otherwise folks like me would be on the outside looking in.
Hi Paula,
Unless you have a transaction with lots of equity in it, I would keep calling other HML's, even if they are not local. I would pay up to 15% for a HML loan, but at that rate, I WOULD NOT pay any points.
Keep in mind that there is also BILLIONS of dollars of "Private Money" out there, and these people would be tickled to do business with you if you presented them with an offer. Who knows, they may even be your next door neighbor!
Best of Success!
BAMZ
Hi BAMZ,
I have a few friends that may be willing and are definitely able to jump in with me on a few deals. It's just a matter of days and finding the right deal before things start falling together.
Hi paulabe713,
That sounds great! Stay on after it, because it will be well worth the time!
Best of Success!
BAMZ