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Updated almost 5 years ago,
Ensuring hard money is a win-win for all involved
I have a single family under contract that I want to flip. Quick numbers:
Purchase Price: 59k
ARV: 120
Rehab: 23-25k
Holding costs, commissions, closing etc (includes hard money payoff): 13k
My hard money lender will do 10%, no points, pay off due at closing (and loan 80% of purchase price). The kicker is the funds have to be out 6 months or more to make it worth his time. I asked if I could sell the house in less time, could I reuse the money. He wants to be involved in the deal, which involves notarized signatures, overnighting documents, etc. It makes sense he's in front of me, if I get hit by the beer truck he gets the house.
My question is this. What can I do, create, or otherwise oversee where he's "protected" but not having to run around doing errands. He values his time, and I want to keep using his funds while they're out but offer him protection. Thoughts?