What should you expect from a hard money lender?

[Rania Tohmah]

What should I expect from a hard money lender as far as terms? Can you ask for space to renovate?

[Odie Ayaga]

There's a little too much "use your friend's money on your very first deal" on this site in general. If you have a friend willing to loan you $200K and doesn't care if they lose money in the deal or you have a background that suggests you've got a higher chance of success than someone with absolutely no experience in real estate then fine.

If not, most starting out have a hard time finding private lenders and don't have the time to wait on a bank loan or don't qualify for a smaller down payment. Hard money is an option that investors should at least be knowledgable about to know when to use it. Also, just to clarify @Anthony Dooley's example above there's a difference between interest rate and APR. If you're paying 12% on a 6 month term you're paying way too much (2% per month). Most new investors can get 10-11% on a 12 month term. I also wouldn't advise a new investor get a loan for less than a 12 month term.

And to answer your question Brad it CAN be a flat fee if there's minimum interest or prepayment penalties as part of the loan. Usually it's not.