Q: I am looking for hard money to fund a house I want to fix and flip. I’ve been asking different hard money lenders what interest rate and how many points they charge. What else should I be researching? Carl, Bloomfield, NJ A: If you borrow hard money, there are more costs other than just interest and points. There are endless other fees hard money lenders can and often charge borrowers. Here are 6 other fees that hard money lenders charge: 1. appraisal fees 2. loan fees 3. administration fees 4. inspection fees 5. credit report fees 6. legal fees. That’s just a short list 6 hard money lender fees off the top of my head—-there may be other fees […]
continue reading Q: I just read an article in the Wall Street journal that loans issued on a short term basis have gone down the second half of the year and they’re saying that it’s a sign that the real estate market might be turning. How do you read that information? Crystal, Alexandria, VA A: That’s a good question, Crystal. I did actually read that article in the Wall Street Journal myself. Remember that when you read an article, you want to just take it as a data point and then add it to other data points that you have. Preferably, you want to give more credence to the local data that you gather in the local real estate markets where you’re […]
continue readingQ: I have a property that I am interested in purchasing with a partner. Would I be able to get a hard money loan or would I be better off with a private lender? Jack, Morristown, NJ A: Good question, Jack. In general, hard money lenders are in the business of lending out money short term for profit–they often borrow and pay interest on the money that they lend too so they are incentivized to charge higher interest rates. Private lenders are typically individuals seeking additional income by passively investing in real estate. Ultimately, access to capital is more important than the amount you pay for it, so if you need money to fund a deal, anything is better than […]
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