Hard Money/Private Lenders

[Scott Houin]

I recently did a deal that was privately funded. I financed 100% of purchase and repairs. The issue i ran into was that when i went to refi, the home did not appraise. I now had to come up with a lot of cash to refior continue to pay on an interest only loan. A property that was going to be a great cash flow property nowhas no cash flow and no equity. I'm lucky because I was working with a family member that allowed me to just continue making payments, so i wasn't really hurt by the deal other than my time.

My question: What would happen if this would have been a Hard Money lender or a private lender that wasn't family and they called the note after 12 months and i couldn't get them the money? Is it typical for them to foreclose in this type of situation, extend the note? I was able to continue making payments, so the only issue would have been getting the cash for the entire loan price.