Posted by Ed Garcia on January 15, 2001 at 10:02:23:
Cork,
In California, Hard Money lenders loan on Residential property at 65% of market value. If the loan is in second position, depending on the deal, they might lower that to 55%.
The thinking is, if they should have to foreclose, they will have to debt service the first mortgage. Therefore they want more room in the deal to cover the loss of payments being made to the first.
As you can see, your deal is at approximately 77% so it couldn’t go hard money. Some lenders will go up to 80% on a second money purchase if you have good credit. I think we both know that if the deal is seasoned and you have good credit, there are lenders that will do 100% financing.
Posted by Cork Horner on January 14, 2001 at 22:56:58:
Ed, What is your brokerage position on 2nd td’s hard money loans? Especially southern California.
I am in a deal in Rialto considering private investor 2nd.
The first is 92k at 8 1/4 the market value is about 120k.
if your office doesn’t get involved in these, suggestions?
I’m asking this question to get your opinion of comparing this to credit card financing at 20%.
I think your answer may be that the first is already past 65% of value so hard money won’t be a consideration on a second td?
I need lending sources which means you write the check.
The areas I have deals in are Auto paper, Mobile home paper, and real estate seconds.
please email data, spreadsheets, papers.