Hard Money, Super High Payments?
Another question about Hard Money.
I just got approved with a hard money lender, terms are 6 months or 12 months at 13.88% interest only.
My question is, when I calculated these payments based on a $50,000 loan, the monthly payments calculated to be $1156 (on 6 month term)!!! And thats the minimum, I will need at least $80,000 to make this deal work, but I cannot afford to pay 2K plus a month!! Is there something I'm missing? Thanks,
Dee 
[ Edited by DeeLewis on Date 11/20/2003 ]
Bring in a partner with $$ - make no payments per month. Split profit in some agreeable manner when sold. Hard $ paid back 1st, then split profit.
The hard money lender is looking to make on the funds provided to you, so when you approach a deal in which you use hard money you got to make sure the numbers work for you and the deal. Some hard Money lenders will calculate the 6 months payments into the loan, or if they don't you should hedge your numbers to make sure that you have enough in the loan to carry it for a couple months until the work is finished and it is leased out. Also if you a corporation that is two years or older, you might consider going to the local bank for for a stated business line of credit, that way if you need a source to help pay for extra repairs or cover a month or so payment it will be there for you. Hope this helps! PM if you are inthe NYC/Long island?Westchester area of NY.
Hi Dee,
Maybe I'm doing this wrong, but the math doesnt seem right to me.
$50,000 @ 13.88% interest, I come up with about $578.33 / month
$80,000 @13.88% interest, I come up with about $925.33 / month
BAMZ