Note Question - Posted by Mike (WA)

Posted by Mike (WA) on September 23, 2004 at 15:32:23:

Thanks. I’ve got the address of the place and will do Due Diligence to make sure I’m not inheriting a nightmare (and that he does indeed have title). The CTLV with my money is 73% so there’s wiggle room at the top if things do go wrong. Credit score is right at 650 so that’s good too. Any other gotchas to look for?

Note Question - Posted by Mike (WA)

Posted by Mike (WA) on September 22, 2004 at 17:58:11:

I posted in cashflows, but am putting it here for wide exposure.

I had someone refered to me today looking for a small hard money loan. They want 8K @ 18% for 6 mos - interest only payments and 0 points. The property has a 1st at 73% LTV and as such this will be a 2nd secured by Deed in Lieu (which seemed srtange to me as well.) I’ve never needed to find hard money, but my research shows that on average, they only go to 65-70% LTV in first position with rates from 12-20+% and 4-10 points. I will be getting more info from these people later on property specifics, but was wanting know to right off what kind of rates one would epect to receive for this kind of loan. I’m thinking at least 4 points and title search fees included with perhaps more due to the high LTV and 2nd position. Other opinions are very welcome.


Re: Note Question - Posted by Randy (SD)

Posted by Randy (SD) on September 23, 2004 at 14:54:11:

What is the CLTV (Combined Loan to Value), sounds like your guy is trying to borrow the down payment or structure 100% financing. IF so make sure their credit is good (650+) and they have the reserves to perform, otherwise pass? the high interest rate is meaningless if they can?t make the payments and a deed in lieu just provides the opportunity for their problem to become your problem.