If I am looking for a Hard money lender to loan me money for an investment that I plan to flip; what are some of the things I must present to them and what are they looking for out of me.
Property in question : 3bd 1 bth & garage home
MV = 170K FULL VALUE
Owner is selling for 160k
Negoiated 135 to 140k with 25k down
About 1000 to 2000k repairs
Recent sales in area reflect market value +/- 10k
The money is expensive (12-15%) with 2-5 points up front. I loan (1st lien only) on property appraised by my appraiser, with a LTV of no more than 70%. I loan for 1 yr and 1 day with a balloon or shorter term.
I would recommend that you don’t use hard money in this case.
you only need 1-2 k get that financed in a regular loan an lender would alow up to 1-2% of cash back to lender for a carpet or what ever allowance. Just put that in to your contract when you buy this property and you would save 4-5 points that you could pass on to your end buyer for closing costs and get your house sold faster.
Thanks everyone, I worked out a deal with the owner : They will hold the mortgage on a wrap 140k @ 6.5% for 6 mths to a year. I’ll put 5k down payment or option consideration, which ever you call it. Make my payments for about 8 mths then cash them out with a conventional loan. And they agreed to me sub leasing the property until I cash them out, once repairs are made of course. And yeah friends and family are much better to borrow from if they have it, If they don’t that’s why we brainstorm to come up with a solution to our money discrepencies.