Hard Money - When To Pay Fees

Most hard money lenders will have to make money. That sounds obvious, but the question is where do they make money? Many times the money they make is in the form of points on the HUD. Sometimes people will hear about paying large amounts of money prior closing a transaction. We do not do this because we want to make sure that if there is an exchange of money, it is done because what we promised (funding the deal) is in fact happening. The risk some people run into when they pay money before closing is that the deal falls apart for some reason. We prefer to have it where everyone is in a win-win scenario and the funds are exchanged at the time of closing.

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