Hard Money Loan Estimate

[Wanda Alderfer]

We are looking at a deal and received a term sheet from i fund cities.  This is our first experience using hard money lenders and it seems inevitable since the duplex we want is mixed use with vacant commercial unit.  Our plan is to turn it into residential. (zoning already approved by boro) The terms sheet is not like convention closing sheets and doesn't say what we bring to the table, just what they bring.  The fees seem high and confusing, so could anyone tell me this is all "normal" for this type of lending? I've read a review that this lender backed out at the 11th hour - and if that happens we'd lose our earnest money.

Purchase Price: $150,000

Total Loan Amount: $126,000 (Includes $106K purchase and 20K holdback construction)

Interest Escrow for 3 months: $3178.00

Loan Processing/Application:" $2050 (Not sure what this fee is for)

Broker Fee: $2520

Loan Origination: $2835

Title: $1325

Interest Rate Promised: 9%

So we'd come up with close to $57 K at settlement.

We would hope to fix and rent it within 3 months

Thanks for the help! Assuming rents would be about $1300 each ($2600/month) once rehabbed