Hard money lenders SCARY?

[Valerie Smith]

☀️I’ve seen a couple posts about people being approved for hard money, then the lender backs out or changes terms etc. I’ve also been warned that some hard money lenders can be a scam. I invest in Florida and Georgia and would like to know which you recommend. Called Lending One and because we’ve never used hard money they said we’d have to do 15% down plus 2 1/2 points, Interest (starts at) 11.5% plus some other fees. These were quotes without pulling credit or filling any paperwork out. Anyone used them or think these are good rates for a 1st time user? I kind of thought one of the points of using a hard lender is so you don’t have to put so much down.

[Jay Hinrichs]

HML require downpayments unless you have years and many deals with them .. first time borrower for certain.

and yes way too many crooks out there.. advertising deals that are too good to be true .. and many people get sucked into sending them money thinking they found this unicorn cheapo lender. 

Lending one is real

lima one is real

lending home is real. 

and keep in mind HML need to make at least a 12% apr to stay in business.. these are not banks borrowing from the fed they get their money from YOU the investor and have to pay far more for it than a bank pays for thier money.

I know most people dont understand how HML works.. but suffice it to say they need to make 4 to 5k a file up front no matter how they do it with points junk fees etc.. plus need to make at least 10 to 12% on the note rate. other wise there is no reason to be in the business.

And like were @Ned Carey works rates can be higher simply because the risk is greater and the foreclosure times very long and costly. especially NJ NY  . So in states with very quick foreclosure rules that are not run through the court system but are handled by Trustee services you can mitigate your risk becasue you can get the asset back in 6 months or less in stead of like the states mentioned above were it can take years.  FLA is middle of the road about 1 year state but still judicial.  Take GA for instance you can be through the entire process in 60 to 90 days same in Texas and Mississippi.