Posted by Rob on November 07, 2002 at 08:01:09:
Michaela,
Thanks for the clarification
hard money question - Posted by Rob
Posted by Rob on November 07, 2002 at 05:34:49:
Question as to the payments to a hard money lender. Say a hard money lender offers 65% LTV. The lender says that they will also loan 100% of rehab costs and are charging 15%. You find a house with ARV of 100k and you get the property for say 60K. So they will loan you 65k + rehab costs of say 10k. How does it work from there? They buy the house and then you pay the mortgage at 15% interest until the house rehabbed and is sold? Then you get 25k - closing costs, appraisals, etc. Is that generally how it works?
Re: hard money question - Posted by wpage
Posted by wpage on November 07, 2002 at 11:54:06:
Rob First let’s clarify the process. You find a home you want to buy and tie it up with an offer to purchase with contingencies for inspection and financing. Then you find your hard money lender. The hard money lender does not buy or own the house…you do. They only loan you the funds in the form of a mortgage against the property. There is no limit to what hard money lenders will do. Usually until they do a few deals with you they will be conservative and cautious as to how much they will loan you. Everything is negotiable. Once you have a reputation with them they may loan you a higher ratio loan. Hope this clarifies the process. wpage
Re: hard money question - Posted by michaela-ATL
Posted by michaela-ATL on November 07, 2002 at 06:29:45:
rob,
are you sure they’ll lend 65% plus rehab money?
the hardmoney lenders i know will pay 60-70% of arv, which inccludes purchase and rehab, if it falls into that range. so, for a 100k arv house, they’d lend up to 65k, if they lend up to 65%. anything above that would have to come out of your pocket. so, you want to make sure your deals are good enough to be covered
michaela
Re: hard money question - Posted by Rob
Posted by Rob on November 07, 2002 at 12:40:33:
Thank you very much that definitely helps.
Re: hard money question - Posted by Rob
Posted by Rob on November 07, 2002 at 07:23:51:
This is part of the ad: 65% LTV. Hard Money Loans to investors. Provide 100% of the purchase price, closing costs and fix up monies. No income qualification programs.
Re: hard money question - Posted by michaela-ATL
Posted by michaela-ATL on November 07, 2002 at 07:29:22:
rob,
i would understand that to mean, that they will loan 100% of purchase andrepair and closing up to 65% of arv. so, if you buy low enough you don’t have to come up with any of your own funds. this would be to differentiate them from those hard money lenders, that require, that you pay part of the points up front and subsequently need your own cash to do the deal.
the way you seem to understand it they wouldn’t be really smart: arv 100k, purchase 60k and 30k rehab?
according to you they would fund this, but i don’t think they’d be that stupid, because they’d be at 90 arv.
just my thoughts
michaela
michaela