Hard Money and Collateral

[Aaron Sweat]

Is it feasible to obtain a loan or a good old boy agreement where a lender offers 100% financing for both the purchase price and construction costs at hard money rates, secured by a second position on the borrower's other properties? For example (using general numbers), a borrower might receive $300,000 for purchasing a property and $100,000 for construction and first on the property under construction and secured by a second on other properties they own. The borrower would then refinance within 6-12 months, repaying $440,000 (including a 10% return), allowing the lender to earn $40,000.