What are typical hard money terms currently?

Question

I have close to 1 Mil in funds available from LOC's on current portfolio. I want to put it to work and thinking of lending some of it out. Curious what current hard money terms look like in midwest. Thanks!

Ryan Davies · Answer

Most are as follows:

• Rates: 10% to 14% (Most Deals are 12%)
• Terms: 1 Day - 24 Months (Most Deals are 6 months)
• Fees: 2-5 points(%) of loan amount paid at closing (Most Deals are 3 points(%))
• Minimum Loan Amount: $50,000 
• Max Loan: 65-70% of After Repair Value(ARV)
• 100% Rehab Financing Available (Most Deals require 20% of purchase price down payment or cross-collateral)
• Closing Timeframe: 48 Hours - 3 Weeks (Most Deals are 10 business days)
• NO PRIMARY RESIDENCES, NON-OWNER OCCUPIED ONLY, BUSINESS AND COMMERCIAL USE ONLY.

Josh Nix · Answer

I'm a direct private lender in Nebraska. Our rates are more than other have stated, and no i'm not running a ponzi scheme lol, but we don't charge any points. Our investors make 12% on their money.  We have great borrowers and in the 5 years of doing this we have only had 1 default. I was able to recoup 100% of my investors money, he is still investing with us today. he honeslt said im suprised it took this long to get our first default.

Doug Smith · Answer

It's going to vary depending on the type of loan. If you shoot too high on the rate, you're going to bypass the stronger borrowers and better deals. Only the desparate will borrow from you. Bridge loans are running between 12%-13% right now and you can usually pick up 1%-2% in points. Just a suggestion, you might want to partner up with a strong, NMLS-licensed broker that understands hard money, can pull credit and has experience with due diligence. Most of the deals we do are in the Southeastern US and we only do a handful in the Midwest, but it works out to be a great partnership with our private lender partners. We sometimes broker deals to them and they are getting a great due diligence package...and the borrower is paying our fee on the settlement statement. It's a win-win. Maybe you can post where you are located and local brokers might be able to hook up with you to help you place the capital and help with due diligence.

Bob S. · Answer

10 -12  + 4ish

Matthew Rolf · Answer

@Doug Carroll not sure if its different in the midwest vs down here in Houston, but we pay 3 points and 12.5% interest on our flips (we could get it a bit cheaper in the future)

Jacob V. · Answer

When shopping recently (in Texas) I've seen between 10.9-12.9% and 2-3 points; I/O; 12 mo term at around 70% ARV and 85% LTC.

Chris Seveney · Answer

@Ken NA

?? He is the lender, your post is written as if they are the borrower

Chris Seveney · Answer

@Doug Carroll

Doug is spot on. 12-15% with 1-5 points depending on ltv, experience and lien position

Joe Davis · Answer

Hey Doug, we are a direct lender in Texas. We lend in Houston, San Antonio and Dallas. We are working with new investors if that is of interest, however if you prefer to have your capital loaned out in your own back yard - we are part of a lender mastermind that I am sure has a few who lend directly in Indiana. Either way - happy to chat and see if I can be of assistance.

What are typical hard money terms currently?

Most Popular Reply