- should you expect the hard money loan people to give you there terms ??? This before you have any appraisal done or any contrct done with seller or the hard money people > Lets say just a pie in the sky i could get this place that is $$$$ and it needs rehab as the seller ran out of money fixing it now he has two loans on it and no money to pay them >>>> and i want a loan to cover all this what are your terms
A hard money should be able to tell you what their general terms and guidelines are Before you are
spending $$$ for appraisals and such. You should also have a good idear about what the property
is worth after repairs as well as the cost to do those repairs before hand. Typically 65% is the After
repaired value is the loan amount to expect. IE: (100k x 65%= 65k) 40k price, 20k fix, 5k costs = 65k.
In a case like this you should be able to get project funded w/ little/no money down…
should you expect the hard money loan people to give you there terms ??? This before you have any appraisal done or any contrct done with seller or the hard money people…
RESPONSE: You would think the dictums of customer service would prevail in these circumstances, but the old rule applies, “he who has the money, makes the rules”. Although I provide rates for clients/prospects upon request (without the need of a full package), I understand the motives behind your lender’s policy.
Lets say just a pie in the sky i could get this place that is $$$$ and it needs rehab as the seller ran out of money fixing it now he has two loans on it and no money to pay them >>>> and i want a loan to cover all this what are your terms
RESPONSE: As mentioned by wealthRx, the typical rehab hard money loan starts at 65 ARV (there are other programs that are credit based that allow for 80 ARV) that allow for 100% financing, assuming that the rehab costs, closing costs, hard money loan mortgage repayment and purchase price all fall under the allowed ARV limit.
I offer a 6-month no pay investor rehab loan that allows for no immediate repayment of the hard money loan for the initial six months (assuming that the total PITI payments + closing costs + purchase price + rehab costs don’t exceed 65%) for those that want to structure a no cost hard money loan.
Feel free to contact me if you have any questions.
Regards,
Scott Miller
Most of us lenders offer guidelines with rates and fees upfront. However, if the appraisal comes back lower than expected then the loan amount must reflect that change.
If you come across a company that can’t give you any guidelines or offer you some sort of idea as to what you can expect then I would look for another lender.
we got qualified up front with our hard money lender. They work very fast. I call them up they get comps and tell me if they will loan me the money for the property plus fix up costs if I request them. Quick easy but 3 points and 16% interest for 1 year terms. Its great until I can get a nice line of credit. I deal with low priced homes. Around 20-50k at the moment