Where can I get the other 35%? - Posted by Jim C

Posted by Ben (NJ) on December 09, 2000 at 11:16:57:

it is hard enough making a loan based primarily on appraised value when there are so many inflated, exaggerated and downright fraudulent appraisals out there. Add to that the speculative nature of “fixed-up” value and now you’ve got potential for double problems.

Where can I get the other 35%? - Posted by Jim C

Posted by Jim C on December 07, 2000 at 18:10:43:

If I find a Hard Money lender to lend me 65% of my contract price, where can I get the other 35% to pay the rest? Any ideas?


You don’t need it. - Posted by Carmen_FL

Posted by Carmen_FL on December 08, 2000 at 16:45:29:

As Mark said, a hard money lender will lend you 65% of what the property will be worth once it’s fixed up. So let’s say you have a house that’s going to be worth $100K. You get it under contract for $62K. You go to the hard-money guy. Since $62K is below 65% of $100K, the hard-money guy will lend you the entire amount - 100% of the purchase price. Since you still have a $3K leeway, they may even either (a) let you roll up to $3K of the closing costs into the loan; (b) hold that money in escrow for repairs; or © (less likely, although it’s happened) let you keep it. As a buyer, I’ve walked away from closings with $$ in my pocket more than once.

Some Hard Money guys want to see you put some of your own sweat and tears into the equation, and will make you come up with you own closing costs, or at least $1,000. Others won’t. The more you work with them, the more flexible they become. My hard money guys will roll all my costs into the loan - closing costs, points, and, if there’s room, even a couple of months of payments.

Re: Where can I get the other 35%? - Posted by dewCO

Posted by dewCO on December 07, 2000 at 23:15:12:

Yo make your deal going in. You need to buy right. Froma MOTIVATED seller. And/or find a partner with $$$$, or have the seller carry financing.

Re: Where can I get the other 35%? - Posted by Mark-NC

Posted by Mark-NC on December 07, 2000 at 19:47:31:

The object of hard money is to get 100% financing or close to what you need. Where the 65% comes from is the premise that you can get 100% financing if you can purchase the property for 65% of it’s fair market or after repaired value.


Re: Where can I get the other 35%? - Posted by Houserookie

Posted by Houserookie on December 07, 2000 at 18:15:20:

Well you can ask Santa for it. : )

Or you can fix it up and sell to someone else.
You can flip to another investor or seller. Or
you can rent out the unit under L/O.


Re: Hard Money Lenders aren’t GAMBLERS! - Posted by NJDave

Posted by NJDave on December 09, 2000 at 08:52:33:

A hard money lender seeks to minimize his exposure while maximizing his profit. Why would a prudent hard money lender make a loan based on the future value of a property dependant upon the skills and performance of an individual who probably can’t get a line of credit from a conventional lending source? Most true hard money lenders make loans based upon the property’s as-is, fair market value.

Re: You are 100% correct! - Posted by MJDave

Posted by MJDave on December 09, 2000 at 18:58:55:

A good hard money lender will make loans based on appraised value, not contract sales price. Why penalize an Investor for making a shrewd purchase?