Hard Money Lender
Hello,
I am at the financing stage of a 41 unit apartment complex. The owner might be willing to do a carryback of 20%. Everybody keeps talking about hard money lenders. Can someone tell me more about them and maybe how to get a hold of some good ones? My credit is good. Would a hard money lender be easier than going through my bank? I want to get in with as low down payment as possible. Any help is greatly appreciated. Thanks.
What is a hard Money lender?
Hard Money is te most expensive money out there usualy. It is there for the situations where there is no other option in most cases. It can be effective for short term loans but usually when using it you will want to be able to flip or refi out once you have done the deal.....My Hard Money source charges between 4-6 points and the interest rates are between 12%-16%....So as you can see on a quick flip with lots of profit maybe...on a deal like you are talking about??? I don't know all of the circumstances.....
Hope This Helps (or gives an better understanding)
Brian
Check the “lenders” tab at the top of this page, or do a google-type search for hard money or bridge loans. The points will be higher, as will the interest. Speed in the short term is often worth the price, and then you’ll have opportunity to seek cheaper money. It’s really a matter of what the deal warrants.
Your past financial history is always important, no matter what anyone says about the non-chalance of HMLs. But for commercial property, I'm sure you know, your numbers homework is especially imperative. Know your true verifiable NOI, the average going rental rate, the area's Multiplier, the violations that need attention, and estimates for any value that you can add to the property to get those rents to where they should be.
Many of the HMLs on this site may be catering to rehabbers of 1-4 family properties, with loan criteria averaging around $250,000. Not to worry, there are just as many out there, if not more, with loan criteria in the high six figures to millions bracket, working the commercial market.
Quinn