Advise on Hard Money Financing in Northern NJ

[Jasmine Cotes]

Hello,

I will be investing in multi families in northern New Jersey and predominantly buying and holding. I will be doing my first few deals through hard money and plan on doing the BRRR strategy.

I already have an FHA loan and funds/reserves are not high enough that I would want to risk throwing so much into a conventional. Hard money looks like my only option.

Any crazy/hidden fees or agreements I should be aware of.

What are points and what do they mean in dollars$?

How much more is it really to go hard money vs conventional, talking small money loans (100-250k)?

What happens when I go to refinance anything problematic or over complicated to be aware of?

Thanks for the help!!!

[Charlie Fitzgerald]

1 Point is equal to 1%...of the loan amount.  So if the lender is charging 2 pts. And you are borrowing 100,000...that equates to $2000 being charged for making the loan to you.  There is normally a lender fee also charged to cover their processing, doc prep and funding costs.  You will have other 3rd party costs for title and escrow services and possibly appraisal costs if the lender requires an appraisal.  Nothing magical or scary about hard money.  Costs a little more for a great deal less headache and a much faster closing process.  Vett your chosen lender and because you are dealing with a direct lender and not a broker and yiu should be good.  Refinancing is no different than any other loan...just make sure your term of your hard money loan is long enough to accommodate your exit from it.  

Hope this helps.