need advice about hard money loan

[Jim Dusobe]

We have a small business with some acreage in Florida. After the last few years of barely scraping by we have decided to try to sell the property. We think it will probably take a while based on the economy and the status of other properties that are for sale in the area. In the meantime we are now experiencing a personal setback and need emergency funding.

We have at least 50% equity in the property. We currently have an 11% private money mortgage that we could likely refinance, but probably only with more private money, so that’s not really an option, especially since we’ll probably sell. Our mortgage holder has been very understanding with our slow payments, but will not be able to assist with any additional funding.

1. Can we obtain a small $15,000 - $20,000 “hard money†loan for our immediate need? (Our equity is close to $500,000) We’re thinking of “hard money†in view of the time urgency and the fact that we probably wouldn’t qualify for a conventional loan anyway.

2. Is “hard money†only for financing/refinancing the whole mortgage, or can it be used as a second mortgage?

3. Will a lender even consider any refinancing if they know we are planning to sell? Should we hold off on listing the property or otherwise letting them know that we’re planning to sell?

Any advice will be appreciated.

[J Scott]

Just out of curiosity, if you really have $500K equity in the house, why don't you just go for a quick sell at $100-200K below market value, and pull out $300K in cash.

It's not an ideal situation, but given that parts of FL could still see some drop in market values over the next year or two, it may be the safest choice.