Hey Drew,I work in the investment space and work with a bunch of hard money lenders and the typical rates I'm seeing from them are around 11-12% right now with a 1% origination fee.

A tough thing we've found though (like you mentioned) is even the highly rated foundation folks in our area -- as well as a lot of the content online -- all have a strong incentive to sell big high-margin solutions.

They typically have multiple origination points (meaning very high closing costs) very high rates (compared to conventional but also compared to 6 month or longer waiting period DSCR products) and almost always have VERY long pre-payment periods up to 5 years.

Shop around if you can to determine what is a good rate to pay.

Typically, private lenders pay anywhere from $500 to $2,000 for loan documents, depending on the complexity of the deal and the attorney’s rates.

Keep in mind, though, that this approach comes with higher down payment requirements and interest rates, which may not be as favorable

Mortgage payment of $870 PITI with 20% down at a 7.25% investor rate.

I’ve had experience with both traditional and private construction loans, and here’s my take:Traditional Lenders: The process can be slower with more paperwork and stringent requirements, but they usually offer lower interest rates.

The whole scheme was buy a foreclosure, "sell" it back to someone that can't qualify for traditional financing with seller financing at a higher rate, once note is "performing" you can sell the note and make a lot of money. 

As a note, residential properties typically are not evaluated with cap rates, but I think you may have been saying a 7.5% cash on cash return or ROI.