hard money loans

[Chris Severin]

I found a hard money lender accredited by the bbb and they are willing to finance 100%. I know that there is a premium for their services, ie high interest but is there anything I should be cautious about with taking hard money. Sometimes it seems too good to be true that someone will fund an entire deal , even the closing costs.

[Maurice Brantley]

Most hard money lenders here in Houston will finance 100% of the deal as long as it meets the 70% ARV rule. For example (ignoring closing costs ect) a house is worth $100K ARV, you buy it for $55K and it needs $15K in rehab. You will be all in at $70K so they would finance 100% of the deal. Now if that same deal required $20K in rehab, you will be all in at $75K and so you would have to come out of your own pocket $5K to complete the rehab. I hope my over simplified example makes sense.