Advice on hard money loans

[Kendelo Hollis]

Hi 26 years old I'm about to purchase my first fix and flip on a hard money loan. Before I get in deep, can anyone with experience give any advice on the ups and downs of this type of deal and what should I be aware of?....

[Steve S.]

There are many things to be aware of ...

1) Don't pay any upfront fees, only a small fee for an appraisal or BPO. Some lenders try to say they need a "legal fee" or some BS up front and those are the ones to not work with.

2) Understand exactly the deal you are getting. Rate, points, fees (other hidden fees). Ask them to supply you with a term sheet or something so you know what you're getting.

3) Ask them what is it based on? Sometimes quotes change because the information you provide changes. For example ... you might say you have a 710 credit score, but in reality you have a 690. The threshold to give you certain pricing and LTV etc... might be present to your credit, or the appraisal or several other variables. Loans are not a black and white scenario. They change, are malleable, and are dependent on many factors in order to deliver the results.

4) get a second opinion. Make sure what you're getting is best out there. Don't just go with the first thing stated.

Hope that helps. Message me here if you want some additional pointers etc... I'm always here to help.

Best of luck out there.