When the contract is up, the owner must return the full amount of the original key money deposit.The key money is collateralized against the property.

I am planning to be my own GC.I have about $150k of cash and want to take out a loan for the construction and hoping to use the land as collateral.

There are many ways to make this kind of purchase without using your own capital...seller financing, private money and angels are all great options.2) Type of loan and terms is contingent on lending entity criteria, deal parameters, buyer qualifications, collateral value, et al.  

You really need a strong business background to access the collateral, but also the business you're financing.

But if the buyer were me, it wouldn't matter what the property was as I'd throw the property in as additional collateral, so there are variables to the deal as to who can borrow on what.

You may be borrowing 100% of another home in reality it's just that the collateral securing your loans are done with two or even more properties.

Some lenders will consider using another property as an extra collateral to cover your down payment, essentially getting you to 100% financing.

Hey everyone just wanted to explain this concept to those starting out or,if you have experience flipping and need access to more funds.But before I explain how 100% fix and flip financing works.I must disclose the truth about most hard money lenders termsStandard terms from most hard money lenders are as follows80% of LTV (Purchase price) 100% of construction costs loaned/ with a 20% down by you plus closing costs and points ARV is usually 70-75% 12 month term double digit interest rate and usually 3 points depending on experience, credit and reservesThis deal is tough for most investors because it requires the most money upfront and the investor is responsible for holding costsOn the plus side...20-25% down if you have it puts you in a better equity position on the deal but it also limits your ability to do this at scale.Then there is...The 90% LTC hard money loanFor this program it usually is 90% LTV of purchase plus constructionInvestor brings 10% plus 6 months reserves and they pay closing costs and fees ARV is 70-75%Rate and term based on your dealThis deal is not bad compared to the first deal.The 10% is the equity play in this scenario and you pay closing costs points and fees plus holding costs for loan.Not bad if you can bring the money to the table in this scenario and it can be used to scale better than the 80/100 program.The 100% Financing option This program offers the most leverage and is ideal for first timers and experienced flippers looking to do more deals with their contractors without tying up alot of the money upfront and holding costs.Here is how it works:Instead of bringing money down you participate in a equity share loan.Were the funds cover the entire cost of the project at a 50/50 split.The out of pocket costs to the borrow initially is the appraisal and a background check fee.From there the loan is funded in escrow and holding costs points and fees are rolled into the loan.Therefore you can complete the project without the costs out of pocket.Requirements for this loan from most hard money lenders that offer it, are based on reserves, flip experience and collateral.

Disadvantages: higher interest rate then other methods, but less than a credit card, credit reported, reduced operating leverage and ROI for the leveraged asset (prefer paid off properties if you have them in your portfolio), full docs required by lenders initially.Another favorite method (advanced or for well heeled investors with capital) is a cash collateralize loan against a cash account in the bank.

So I contacted a different person at their office.....someone who is on the SALES side and does not have collateral duties of Office Manager, etc.