Is this a hard money loan?

[Deano Vulcano]

What are the legal ramifications for a private party to  borrow from a private lender at 8% and then turning around and lending that to a rehabber for 14%?

[John Thedford]

If they are giving you a signature loan and then you lend it secured by RE, that might be a great way to make some money. Banks do it all the time. They give you nothing and then lend it out at 5% or so. Private money at 8% is not bad IMO, I am paying 6.25%-7% depending on the lender and then buying rentals. I would caution you to be 100% sure that your borrower has the ability to repay or that you do. What if you lend it and they default? How will your lender accept late or defaulted loan payments? If borrowing from a family member, that could create a LOT of stress. Your plan is not bad but make sure you can cover your obligations.