hard $$ too expensive-what's the point? - Posted by terry

Posted by IB (NJ) on March 08, 2002 at 15:12:14:

(800) 372-3393 , ext.242

hard $$ too expensive-what’s the point? - Posted by terry

Posted by terry on March 08, 2002 at 09:35:57:

isnt the whole point of hard money lending to get you a chunk of cash, quick, so you can compete in a cash-is-king hot rei market like mine (atlanta)?

i’ve got GREAT credit, good job, excellent monthly cash flow (that i save as a cushion for the two rental properties i have) but dont have 80k sitting the bank to snap up up more fixer-uppers. i’ve checked with some hard money lenders and they can get me the 80k easy, but they wont allow me to roll in their fees.

in other words, i would still need to fork over 8k or so upfront just to get access to their money. the lenders i’ve checked with charge 7% - 12% in points upfront, and then the understandbly high interest rate on the balance itself. i dont mind the high interest because i can make the payments easily, but i dont have the ability to pay 8k in fees just to get going.

is the lesson here just be patient and save for six months until i do? are their hard money lenders who charge less upfront?

thank you in advance for any replies and happy investing to all of you.

Re: hard $$ too expensive-what’s the point? - Posted by Bob Beckman

Posted by Bob Beckman on March 09, 2002 at 10:40:52:

Hi Terry,
Rehab Funding will let you do a deal with a 6% sellers assist. This has the same effect as letting you roll a large part of your closing costs.
Good luck,
Bob Beckman
Rehab Funding

why not get a LOC - Posted by tang-0-rang

Posted by tang-0-rang on March 09, 2002 at 02:18:01:

…to get the deals done… some lines of credit can be rolled into mortgages to hold properties.
I dont know alot about this but you could look in the archives for keywords such as “Ed Garcia” “business plan” and “line of credit” you should find all the info you need right there, I did a search as a test and found 7500 matches, good luck.
Todd Williamson (CO)

Agreed … - Posted by Redline

Posted by Redline on March 08, 2002 at 23:57:42:

Looked around for hard money recently and came across a few names. Now I only talked to 3 people but basically they wanted around 10-15k upfront (inc doc fees, legal fees, pts) - 12-15% interest (not a problem) and 1 even wanted fees on the backend! And this is all on property that would (obviously) appraise to their standards AND my good credit. Ridiculous!

I asked them how many deals before this gets reasonable, and they were like “this is pretty much it”.

I don’t know about you guys, but my deals don’t allow for $20k giveaways. I need to look further, I guess …


Re: hard $$ too expensive-what’s the point? - Posted by Kim (FL)

Posted by Kim (FL) on March 08, 2002 at 22:21:26:

Ask around for private lenders – meaning individual people who want to make a high interest rate – eventually you’ll find one. Also – as others said - each company has their own rules for hard money so just keep calling.

We found a guy who would give us a 6 month balloon (we rehab and sell) no questions asked, no appraisal, NOTHING but he wanted a 10% return on his money (for the “newbie” this is not a 10% interest rate it’s different). So – if we needed 90,000 he’d hand us the check and we’d be cash buyers. Then when we sold it we’d hand him 99,000 (90000 + 10%). It’s A LOT to pay but he didn’t record a mortgage which saved us about 1300 in Florida and he didn’t have us making payments or giving a penny upfront. He did write up a lien but he does not record them (to keep the money in his pockets). It was worth the price. We ended up talking to a relative who has cash and has told us he’s impressed that we took the leap into real estate about our pending financing. He was interested so we presented the same exact plan as above to him and asked for a smaller fee – he did it for 8% ROI. Which is still a lot of money for him!! This, in my opinion, is the way to go. It’s hard to find someone who has money and a desire to loan it to a “beginner”.

On our last rehab (which was our first rehab, we’re now doing our second) we got a 90% Fannie Mae investment loan and used our savings for the 10%, then put 14k on our credit cards for the repairs THEN paid $900 a month for 5 months till we sold it. TOO stressful and we were cash poor for that entire time!!!

Good Luck – it’s really networking and presenting yourself well. The first guy we found was a friend of a friend’s friend who loves real estate and he does private lending all the time. So - it took some chatting to find him. The funny thing is that when we told him we needed 90k and he asked us questions (employment, RE history, education) he said “if I don’t have it all, I have a friend who can do this”. Network, Network, Network. These investors can make so much money if they can put their faith in you. I don’t feel like thinking – but that guy who wants a 10% ROI is probably getting a 30% interest rate or higher if you turned his fee into an annualized rate. Not bad!!! :slight_smile:

Re: hard $$ too expensive-what’s the point? - Posted by Jon

Posted by Jon on March 08, 2002 at 21:18:40:

Where is the best place to look for hard money lenders?

Re: hard $$ too expensive-what’s the point? - Posted by BrandonT(So.IL/St.Louis)

Posted by BrandonT(So.IL/St.Louis) on March 08, 2002 at 16:02:54:

I use Statewide Capital Investments (www.statewidellc.com) out of Texas, they lend here in the Missouri/Illinois area and they charge 4 points and 12.75% interest. They also roll in all the fees and points to where its very convenient for me.

Of course I’m still on my first deal with them, but it’s looking good, I bought for 17K, am putting about 15K into it, and comps/appraiser give value after repairs of around 50K.

Hard money is expensive but without it I wouldn’t be able to touch this awesome deal (awesome to me anyway) since the seller wanted cash.

Brandon Treat
Southern IL/St. Louis

Talk to this woman… - Posted by IB (NJ)

Posted by IB (NJ) on March 08, 2002 at 14:21:39:

Ildiko Trien of Gala Resources. She charges less on the rate and points. Plus, after a few deals (maybe 3-4) you may qualify for a $500,000 credit line. Tell her the guys at Opticomm Development referred you.

Re: hard $$ too expensive-what’s the point? - Posted by Steve-Atl

Posted by Steve-Atl on March 08, 2002 at 10:02:19:


Hard money lenders are a varied group with each having their own criteria. Most I know are private individuals but some are mortgage companies.

Some charge higher fees, some lower…some will let you finance the points, others will not. Its hard to draw any conclusions from talking with just a few.

E-mail me privately if you want some specific advice.

Re: hard $$ too expensive-what’s the point? - Posted by Steve-DC

Posted by Steve-DC on March 08, 2002 at 09:45:52:


Yes, there are lenders who charge less.

Although I’ve never used one, I had to call about 20 before I found one that would work if I needed.

My suggestion…keep calling and asking around.


Re: hard $$ too expensive-what’s the point? - Posted by Ned - IL

Posted by Ned - IL on March 11, 2002 at 14:46:14:

I am from Edwardsville, Illinois.
My interest lies in the buy, fix, sell strategy. I am still in the investigation stage.

Where are you at?
I am new and if you are anywhere near I would love to hear more about your rehab experience. How the loans work? What all did you have to do to the property? Contractor/handyman use?