Hard Money Payments
How much are hard money loan payments ? (I know if depends on how much you borrow, etc) but say you borrowed total of 52,000 from a hard money lender, what (with an average interest rate) would this cost you every month if you're were trying to sell after rehab?
JB
[addsig]
Talk with a hard money lender, if you have a deal going on! Its hard to say. Many hard money leaders are different. Write up an executive summary, which is your plan with this www.property.Things that you would want to list are FMV, cost of repairs, and final price with a show of comps. And show it to your lender and shop around for lenders see who has the best rates. I can imagine there are many just in JAX. Some hard money lenders wouldn't have a monthy payments, like a normal CONV lenders. Everyone is different.
Lance
I am new to Hard Money so **please** correct me if I am wrong. I thought HM lenders put points onto the loan (which are rolled) and then charges an APR of about 14-18%. You then take the APR and divide by twelve and that's your monthly payment. I realize all HM lenders are different; but, I thought all of them were usually at least interest only.
I have yet to do a Hard Money deal so I am only talking from my study.
That's exactly what my Hard Money Lender does. Charges 5 points on the loan, then 15% interest only, balloon note due in one year.
What do you do when you have rehab'ed the property in, say, 3 months? Do you rent it out for a year and then unload? That is, of course, if the balloon is due on one year and no less.
Most hard money lender don't have prepayment penalties of more than 3-4 months. They like ot get the money back so they can loan it out again.
Aaron DeCollibus
After three months when it's rehabbed, I either sell it, or rent it out. If I sell, I'll usually just make the hard money payments another couple of months, HOPEFULLY, till it's sold.
Would you guys or gals who have done the RE thing for a while recomend starting out with HML? I realize the rates are close to predatory; but, would someone who is beginning in RE be able to protect himself enough to use HMLs?