Posted by phil fernandez on April 27, 1999 at 18:19:21:
You’re alot better off by establishing an equity line of credit often called a working line of credit. I have two of them right now and am paying 9.25%. No points. No prepayment penalty. Of course you will need excellent credit. But sure beats paying 15 to 18% interest with up to 10 points.
Hard Money Interest Rate… - Posted by BRnBA
Posted by BRnBA on April 27, 1999 at 04:17:08:
What interest rate do most hard money lenders expect? I will be talking to a guy tomorrow about hard money, what interest rate should I offer? He is a local business man whom I know personally and is very well off. Any suggestions…do’s/don’ts, would be appreciated.
Re: Hard Money Interest Rate… - Posted by CarolFL
Posted by CarolFL on April 27, 1999 at 07:14:52:
Why not ask him what would make it worth it to him?
From what I have heard around the country it goes from 11 -18%, 0 to 10 pts… interest only usually, balloons from 6 mos to 3 yrs, and prepayment penalties or not…
Yesterday, as an example, was talking with a guy about 15%, 5 pts to the broker, 18-3 yr balloon, 3 mos prepayment penaly in the first yr, 1 mo. after that … but with the poswsibility to roll that 3 months into a next, consecutive, deal.
Again, I’d ask the guy what return he would be looking for on a very secure deal.
Good luck.
Carol
Re: Hard Money Interest Rate… - Posted by BRnBA
Posted by BRnBA on April 27, 1999 at 08:19:41:
I was thinking short term like repaying after each close. I have a credit line that interest is due once a year…maybe I should be thinking in those terms on the hard money also. I guess it really depends on how the lender wants to structure it. Thanks Carol!