Questions about getting Hard Money from friends

[Pablo Lloreda]

Hi everyone,

Looking to get some duplexes with friends' money and make them some money in the process. I already have the friends and I've started looking at properties. I have an agent, lender, CPA, etc.

Questions are:

- What is a reasonable time for returning the loan? 1 year?

- What is a reasonable interest now that interests are wild? 10%?

- What is the paperwork necessary or what options do I have to make the loan official? I do trust my friend very much, but I want to be safe.

- Outside of piling up on properties and then risking some being vacant or rents going down, etc. What are the risks of this strategy if done safely and slowly?

[Zachary Ware]

Hey Pablo, 

Hard Money loans are typically 6-12 months long. 10-12% rate depending on how experienced you are. If you are using your friends' money and not an established HM lender, they should file a lien on the property for the amount they provide you. You should work with a lawyer to have the lien filed, a promissory note drawn up, and any other necessary legal documentation.