Hard money in Texas - let's compare!

[Sandrine Rangeon]

Hi, I'm new to the world of hard money, and I feel like the offers I'm getting aren't that great at all.

What kind of interest rate and points are you all getting?

This is for an investment property in Austin, TX, free and clear, and rented on airbnb. The money will be to finance my next deal and/or build an accessory dwelling unit in the backyard, which would also be a rental.

And if you have any contacts for hard money lenders, I'm interested! 

Thanks

[Joey Sullivan]

Here are some questions to ask when shopping around for a hard money loan:

- What % of the ARV is leant out (e.g. 75% of ARV for rentals, 70% for flips)
- What is the interest rate?
- What are ALL the fees? This includes things like origination points, fixed fees, draw fees (from repair escrow), required 3rd party fees that other hard money lenders would not require (e.g. certified appraisal, legal fees).
- When are the points & fees paid? (e.g. at closing or when you refinance / sell the house?)
- How fast can the deal be funded and close?
- Is there a minimum loan term? If so, what is the pre-payment penalty?
- Is there a maximum loan term? If so, what happens if more time is needed?
- Does the loan require a repair escrow? If so, is it 100% of the repairs, or only part?
- Does interest accrue on money held in the repair escrow?
- What is your draw process and how quickly will I receive funds from the repair escrow?
- When are interest payments due? Are property tax escrow payments or anything else paid along with it?
- Does one have to use a specific conventional lender, or can anyone be used (for buy-and-hold properties)?
- What properties do you not lend on?
- What stipulations does your loan program have that other hard money lenders do not? (e.g. Contractor gets the materials funds up front, but the final draw payment is not refunded until you refinance; must have only 1 contractor bid and do a mechanics lien at closing [if you have more than one contractor it won't work]; MLS deals work, but you cannot have an assignment of contract; etc)
- What other value-added services do you provide that other hard money lenders do not?