Looking for hard money experiences

[Joshua Szentes]

Hello everyone. I am a rookie working towards my first deal. I am trying to learn more about private lending. The high interest rates have always scared me but do they lend for less than 20% down?

[Scott W.]

Hi @Joshua Szentes!  You will find that there are a few schools of thoughts and that some people swear by private lending/hard money loans and others have a strong distaste for the high interest rates.  

Here's a quick run down on why you would want to go the private money route:

1. Need access to quick funding (traditional financing can take a month or more vs private money where they can close in a week or two)
2. Want to avoid banks and institutional loans
3. Need more flexible terms
4. Need to cross collateralize other properties (where traditional lenders often won't accept this)
5. Credit problems 

Private money / hard money lenders will finance and provide you a loan on the After rehab value (ARV) so you can finance the rehab costs. Anyone lending you money wants to make sure that you have skin (aka money) in the game and that you have the money and resources to support the rehab process, holding costs and are going to provide their money back. Number one rule of money, is don't lose money!

In summary, it's all about finding the right deal and deciding what route you want to go.  I hope that helps!  

Scott