Why Should I Use Hard Money Lending

[Scott Bares]

I am a dentist in North West IL. I currently have 7 Locations and we own 4 of the properties where our dental offices reside. We pay ourselves rent from these locations, which assures us a profitable return. I placed our company (Shady Oak Holdings LLC) 100% in my wife's name to assure that she has income in case the unfortunate would happen to me. Shady Oak Holdings LLC also owns a single family residence and an apartment above one of our locations.

We are looking to expand into real estate investment using rental properties as well as the BRRR method. We are in a rural community where rehabs can be found very inexpensively.

I dislike banks as we purchase a ton of equipment and my credit is constantly getting checked and I am interested in information regarding hard money lending as an alternative.

I would greatly appreciate any feedback from anyone that has experience with hard money lending.

Best Regards,

Scott Bares DDS

[Kerry Boyle]

Originally posted by @Uneeq Khan:

@Kerry Boyle

Is there a calculator to calculate monthly payments on a HML? I imagine payments could be over 10k a month for 100k loan over a 1 year period with 12%. Just doesn't sound reasonable. Or am I missing something?

 Yes, you are missing something. 

Hard-money loans are not amortizing. You owe 100k throughout the term and make $1,000/mo payments until you can pay off the $100,000. 

You also don't (typically) get an escrow for taxes and insurance - investors typically pay that off when they close, or when they come due to avoid penalties.

editing for calculation - Loan Amount x Interest Rate/12 = monthly payments. Much easier to calculate than an Amort loan.