Crash Course on Hard Money Lending

[Jamaal Johnson]

Good morning all!

I was pondering through ways to approach various leads I have received through Direct Mail campaign and figured I would throw a few questions out to BP for experienced lenders to give their take on. I feel the answers to these questions will provide solid ground for any newbie who is thinking "what should my next steps be".

1) How much should a new flipper expect to come out of pocket for when doing first couple of flips? (Typical Points/Interest and up front downpayment)

2) What is the process like when the borrower is needing a draw to pay for work completed?

3) After how many flips with a lender should the borrower expect to receive more lax terms? (Less out of pocket cash)

4) What are mistakes you have seen from Flippers you have dealt with via Hard money loan?

5) How can a blue collar worker with low to no personal assets/income work around this dilemma to obtain Downpayment for Hard money?

6) How often are interest payments wrapped into balloon so there are no out of pocket charges to borrower during construction/market for sale of property?

@Jay Hinrichs I was hoping you can answer a few of these given your background as a lender & your overall REI experience.

ALL COMMENTS ARE WELCOME!