No Interest or Loan Fees: Hard money loans typically come with high interest rates and additional costs that can quickly eat into your profits.

They often cost less to acquire than other types of real estate, yet they can yield similar or even higher profits.

The property is important to us, and the numbers mustshow the deal will produce a fair profit, but as direct lenders (i.e., we lend our own money) we always bet on the borrower first.

He ended up partnring with another investor who was willing to front the repair costs, and they shared the profit on the sale.

Options1) I have some cash buyers who are ready to acquire the property under the as-is condition2) Make basic updates to pass U&O, rent it for two years, and refinance it after to take out my investment and profit. 3) Make an update to get the maximum value from the property (Bought at $126K, as-is value $165K, and updated value $265K)The challenge that I am facing is to make the title clean faster without waiting two years so that I can take my investment out and put it into the next foreclosures.

This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.This example shows that while the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall annual loss.

He was slow on selling it, believing that all the money was mine instead of trying to close the deal quickly so I could do it again. so I ended up spending my profits on the monthly mortgage payments.

At this stage, you want to ensure that the property is cash-flow positive, meaning the rent covers expenses and leaves a profit.4.

Definitely worth it, especially when working with not-for-profits.

The bottom line is making sure your scope of work to the property does force enough appreciation so you have a nice profit margin.