Paid off our Hard Money Loan!

[Tyler Rasmussen]

Today I dropped off a $200,000 check to pay off hard money we borrowed a year ago to purchase a 77 unit apartment complex. It was a great feeling to get that debt off our back!

I have a couple lessons learned from our first hard money experience. 

1) Make sure you include your plan to pay the hard money back in your up front planning and underwriting of your property. 

2) Use an attorney to formalize the agreement and record it properly  Then stick to the agreement no matter what. As I left our lender they mentioned that they're looking forward to the next deal they can do with us. I believe that's because they received their monthly payments in full and on time for the full term. And spend the couple of hundred dollars for the attorney to draft and record the agreement, don't try to do it yourself! 

Hard money is a good tool with the right plan and property. But I don't think it's the right tool for every investment.