Advice on a hard money loan deal

[Brian K Morton]

Dear Wise Investors 

I am currently looking to get a hard money loan on a SFH that I plan to rent out in Missouri.

ARV: $85,000, Purchase price: $58,000, Down payment: $8,700, Loan amount : $49,300, Cash flow: $260, 4 points

The term for the loan is 12 months and I am required to use a LLC on the property and I wondering what would you do with deal and how would you get out of the hard money loan without having to sell the property?

[Jon Reed]

I have never dealt with a hard money lending company. All of my HML has been through individuals who have extra cash to invest.

I would say check out the details and read aaaaallllll the fine print. LendingOne advertises "rates as low as 7.49%" but their lending rate is 75K-4mil so I bet that 7.49% is if you want to borrow 4mil and if you want the 75k it will be something like 27%.

Also, in your example you are showing that you are doing 15% down ($8,700 down). So... do you only have 15% down or have nothing down?