Usual Total fees interest etc for 100k hard money loan for 4 mont

[Michael Plante]

Speak to me like I am 5 Years old 

Customary Total fees interest etc for 100k hard money loan for 4 months?

[Jay Hinrichs]

OH you want me to do the math OK

100k  12% interest is 1k per month.. you have the loan out for 4 months thats 4k  in interest.

lenders charge points.. as pretty much every lender is borrowing the money to loan it to you.. so its not like they make the 12% for the company they might have private investors or have done a PPM or have a bank ( which is what I had ) or wall st.

So in my day I had about 30 million with my few banks at a rolling % rate between 5 to 6% and one point but that was for the year.

So if I put out 100k to you at 12% I made the delta on interest and I kept the points.. so if I could spin the money 2 X a year my cost was maybe 1/2 point to 1/4 of point compared to what i charged you IE 1 to 2 points.. but in my day my loans were 5 points and 15% so we did pretty well.. and if you paid off sooner than a year and we got the money back out say for 2 turns in a year we made 10 points and 15% or 25% apr.. so when U pay off early EVERY HML yield increases.

But again back to the math.. point 1 point 100k = 1k 12% interest 4 months is 4k add in junk fee's or not.. but say not your paying 5k total to borrow that money for 4 months.. and since the 1 point is paid off in less than one year the lenders yield is greater than the sum of 1 point and 12% .. So just use the formula and plug in what you negotiate from your hard money lender. be it 2 and 12 1 and 8 etc.etc.. like right now my bank rate is 1 and 5 for spec loans. the best I can do with HML is 1 and 8 with no junk fee's and of course the bank does not charge junk fee's only appraisals. And then you have the 1500 to 2k in 3rd party title companys closing costs.. so add that to the 5k and yoru right at 7k to 8k for 4 months on 100k loan.