In a deal but running low on maintaining carrying cost...

[Adrian Smalls]

I am into a deal for $25K but permitting process killed my carrying cost budget.  The project is only 25% completed and I am running out of funds.  It is a hard money loan.  Any thoughts?

[Jeff S.]

Borrowers are sometime afraid to call their lender with bad news, @Adrian Smalls. Don't wait until it's too late. Let them know now that there are, or might be, some issues. If you have a handle on the problem, your lender might:

• Loan you more money to finish.
• Defer your payments until the end of the loan. Perhaps compounding the interest in return, if legal in your state.
• Modify the interest rate/payments in exchange for an equity participation.
• Extend the loan maturity date to give you more time, though it sounds like that's not the total problem.

Be up-front and honest. Present a plan that shows how you will get back on track. Lenders do not want to foreclose and they do not want the property.