:cool HELLO all this hard money talk I have a person whom is looking at a posible hard money , as his credi is poor about 560 to 570 fico. WHAT is the deal is this he has found a resort that is for sale by owner in Oregon for 1.5mill !! THIS resort has a value of 2.0 mill !! HE has about 300k of his own monety to put in to this like a down payment AS well the sellers are willing to take a second . HE is looking for around 900k in hard money for 1 to two years ??

THE place needs some updateing but is making money /// the cabins are rented full 8 months out of the year for 100 a night and there are 6 of them !!! THERE is more to this resort as well it makes over 100k a year after expenses !!

THE owners are only selling as they are getting to old to run the place ,and they want to travel

MY question here is do any of you think he could get a hard money loan and if so what kind of terms ??? AS well with who ?? AS he would need a fast close with in 30 to 60 days if possible ??

THANK you for the help :beer

I’m no expert but it seems to me that with the guy putting down $300k cash and the sellers taking a second he’s in a better position than most when borrowing, especially being at 45% ARV.

Is the value at 2 million or 20 million? A Hard Money Lender that your referring to would need the money to cross referenced with something.

Does the resort have any real estate, equipment ect that is valued at $900,000?

Yes it can be done but you or the buyer needs to do more work; a lot more work. On another note $100,000 a year with a purchase price of $1,500,000 equals a cap rate of 6.6 percent, not exactly a great deal.

:cool NEED to do alot more work ??? IAM confused here what more work ??

AS well it is 2 mill /// THERE is 2 acres this resort sits on it has a gift shop coffee // sandwich shop and 4 pull through pads for rv s

AND a owner/mangers home with office !!!

WHOM would any one say he should go to  to get this hard money from ???  AS  was posted it is a 45% deal  and owner taking a second

:cool IAM sorry i forgot to say the 100k a year is after every bill on the place is paid for the year !! MAKING a profit of 100k a year is not so bad is it ?? AND with the owners living on site they have all there bills paid as well minus there personal stuff food and the like :beer

A Hard Money Lender will loan based on assets; nothing else. Sometimes with good credit, experience and cash reserves a Hard Money Lender will loan on the prospective value of a building. To get a loan your going to have to verify all the assets the resort has to even get a lender to give you the time of day, of course this is assuming that the appraisal is on the resort itself and not the 2 acres?

I know your thinking a 45% LTV is a great loan but its not, especially to a hard money lender. The assets are not verified again the LTV is going to mean nothing to a Hard Money Lender. Another point that you havnt addressed; how is the owner going to payback the loan? With his credit a refinance is not going to be possible especially because it will be based on the business.

Making $100,000 per year is a mute point. Your saying if I purchase a 20mm dollar building and get a net profit of $100,000 thats acceptable? Thats not the way it works. I’m willing to bet you or the buyer haven’t even factored in a possible mortgage you will have to get on the property to payoff the HML which would eat in to all that $100,000.

:cool HEY where are you getting this 20 mill at?? I SAID IT ONCE I SAID IT TWICE IT IS 2 MILL NOT @) MILL !!!

AND as well i said the updates will incresae the income !!! AND with the old loans paid off this in turn frees up more money !!! MAKEING the income more as there will be less going out !!! THE yearly income will jump a lot in two years think updates and just the normal run of things they go up !!! AND two years of paying on the hard money loan will look very very good to any refinance person //bank !!!

AS well the apprasial on any thing is for the land and all of the cabins gift shop all of this !!!

IF you have some one doing your apprasial and they are only apprasial is on the land then it is not aful meal deal !!! AND if you paid for it you were screwed out of your money

I hope this makes things more clear for some and not cloudy for others ?? :beer

I was just an analogy for the 20mm. What I was trying to say to you is that you can not just detirmine $100,000 is a good living and it makes it acceptable to loan officers. You need to derive that from other methods such as using Cap Rates.

You don’t seem to want to take my advice so I’ll just put this as simply as possible and move on-

  • No Hard Money Lender is going to lend on a prospective business
  • No Hard Money Lender is going to lend on unverified structures
  • A Hard Money Lender will loan up to 75% of the purchase price or value; which ever is lower. Not subject to repairs.
  • A Hard Money Lender will be concerned with the credit, income, assets and debt ratio because they want to be paid back .
  • Staying in a Hard Money loan for 2 years is a very very bad idea.

In simplest terms-


No, not with a Hard Money Lender. Try getting a few partners or private investors that will participate for some of the profit. If you can guarantee an exit strategy by refinancing in a few months then revisit Hard Money, I can even point you in the right direction. Im not trying to be a jerk I’ve just gone through this all before and Im trying to save you some time, Good Luck.

:cool THIS is a working (not a going to be ) resort making money now !!! NOT some time after the buy !!! AS well there are hard assets at and on this resort !!! WHAT i was asking was this

IF this person was going to put 300k down and the seller was willing to take a second could he get a hard money loan for the rest of the deal could it be done ??? AS the person needing the loan has bad credit is why he is looking at hard money !! IT would not have to be for 2 years this is just the # he used to me !! Iam sure it would be more like a year . AS this place the property is going up in value at the rate of 25 % per year and has for the last 5 years

NOW can you or any one answer this question ??

For arguments sake, if the project has verified assets a Hard Money Lender will loan off the purchase price-

Purchase Price: $1,500,000
Buyer DP: $300,000
Seller Second: $300,000
Hard Money Loans: $900,000 52 Percent LTV

So yes you could find someone to touch that. You don’t want to finance it as a business but as assets instead, include everything that is being bought that could be resold. If the appraisal is done on the value of the business its worthless.

:cool thank you the apprasial would be on the whole asssets

SO now we have come e long way to get a simple answer again thank you !!! could you point me in the direction of some one / THIS would be that i could tell this person about for a loan ??

PM sent.

You will need to speak to a commercial hard money lender—if the NOI is only 100K per annum, the debt service on a 1.5 million dollar loan will be in excess of 156K…

I don’t have any confidence that this will be funded based upon the info being shared—would need to know more to determine feasability.


Scott Miller

:cool WOW i am so confused here as to how a question can get so messed up ???

THE loan would not be for a 1.5 mill the loan would be for about 800k to maybe 900k !!!

AS the buyer is putting 300k down and the seller has agreed to take a second for any amount that would make this work !!!

IS this more understandable ???

THE sellers are just getting to old to run the place and keep it up

The property cash flows within acceptable debt service ratios at 800K-900K (assuming 100K per annum is the NOI and not the gross rents)—I check the guidelines in the morning to see if there are allowances for a 70/10-80 CLTV configuration (70% Lender 1st + 10% Seller 2nd).


Scott Miller

:cool SO EZLOAN what have you found out ?? AS this person is ready to go and make this happen !!! THIS is if it can be done ?? I have sent all the information i recived from people to the person !!

AND what we are looking at here now is who ever can get this done the fastest and soonest is the so to speak winner !! AS this is a by owner right now but if he can not do any thing here very soon or show he can ?? THE sellers will list it with a local realtor and we all know at happens then the price goes to h

i have found from experiece that most hard money lenders take your info take 2-3 days and then say no do they even look at the comps for what you are buying and what the comps would be after all the updating remodeling and such is completed also they tell you credit scores dont matter but then say it isnt good enough whats a person to do

:cool HEY KEVINEWB if you found this to be the case what did you do ??? LEAVE your deal and go on ??? IAM thinking you found some answer you are still here ??

I wouldlike to know more about your deal/deals gone bad from hard money lenders!!

i am currently still looking but all i am finding is loan to own guys out there who ever said hard money was easy to get must have been dreaming it is more like hard to get money

There is no allowance for subordinated debt (seller second) with the program that I had in mind—feel free to contact me if you want to run this as a 70 LTV deal…


Scott Miller