Hard Money Quote

[Heather Walker]

Hello!  I am a new investor and have done much of my learning here at bigger pockets.  I have read in other forums that Hard Money rates vary greatly by location.  We met with a hard money lender this week who is willing to lend, site on seen on an auction home, to us despite not having experience.  

I have spoken with other Hard Money lenders in our area but they will not lend without an inspection. The home owner occupies the house. I have been to the front door and have seen updated pictures on the MLS from 2011. We are very confident in the home we are targeting. The lender is charging us 5 points, 12% interest and an 80/20 profit split. They are also requiring us to build the rehab cost into the loan and not giving us the option to fund the rehab. This should be a cosmetic flip that we should be able to fund ourselves. We are also paying interest on the points and over $1000 in fees.

We feel like we are being taken to the cleaners.  We also feel like we don't have many options on an auction home.  Does anyone have any suggestions?  Are we giving away too much?

Thanks in advance!

[John Mathewson]

@Heather Walker  we have worked with several hard money lenders and those rates I have never heard from anyone. Those are some pretty steep terms. Everyones needs are different so may work for some. I believe though if you are willing to put down 20% then you should not have a problem finding better terms. Also i have not had a hard money lender inspect the house before. I have had them send out an appraiser but that is all. I'm sure the home owner would allow an appraiser in the home since you are the one buying it. Hope that helps just my experience.