Hard money details

[Ray Bontrager]

Hi, I am looking to close my second deal but need looking to use private or hard money. I don't have any good private money connections yet so have been checking into hard money. I talked with several lenders and trying to understand the number system. So if I get a hard money loan for 100k and pay 15% down, does that money that I paid down go towards that 100k when I pay back or not. And if they have, say, 10% interest. Does that have to be payed back on top of the 100k and downpayment?

Thanks for any help in understanding this.

[Abbey Humphreys]

Hey Ray! If you got a hard money loan for 100k, while paying 15% down, that would mean that the purchase price would be ~117.5k. Is this the case here? It is tough to tell what you're asking without knowing the cost basis of the deal. 

Regarding your second question- you would make monthly payments of $833.33 but you likely would not be paying down any principal with these payments, as most hard money loans are interest only. As a result, when it comes time to exit (refi or sell) you would need to pay off the 100k balance in full.