I've just got to laugh and shake my head at some of the comments and misconceptions.

A common misconception is that preferred returns are a representation of how much of a cash on cash return an investor can expect to receive upon every distribution.

It's a misconception that someone with no experience and 2000 miles away can find and renovate a property and do it for less than a turn key company.

I could not find too many posts on essentially a newbie guide to hard money loans, and therefore I’m here to give the incoming new investors what little insight I have on the process and some of the misconceptions I had.Hard money actually requires you to have a down paymentWhile I had read a bit about HML and listened to a couple of podcasts that had talked about them nobody ever actually mentioned YOU NEED MONEY INTO THE DEAL.

I will add a common misconception with the new conventional mortgage program for 2-4 unit properties though about under which circumstances you can use this income: You will need a 12 month verification of rent or verification of mortgage. 

A common misconception is that you need 20-25% down for non-owner occupied investment loan products.

@Bill Richard You seem to be suffering from some misconceptions;No basis for "fraud", as to the 2nd mtg holder, from the facts given....default, yes.The 2nd mtg holder has no "rights" to assume the first....pay it off, yes.There's no real estate agent with E&O to go after....this person was not representing this lender/individual as an agent working for a commission....this person was acting as a principle, which their broker's E&O has nothing to do with.The title co. has no liability for the "no seconds allowed" clause in the 1st mtg......that's a breach/default issue between the 1st mtg lender and the mortgagor.

Alternatively, you can still request whatever issues want to be fixed resolved, and see what their response is.A common misconception is that you can only request inspection repairs doing the due diligence period.

There are so many errors and misconceptions on it I stopped reading them halfway through. 

Well said.I have had a few out of state investors reach out with these types of misconceptions and it's so easy to think "Orlando" is all the same.