We are a private hard money lender in Texas and we do charge a 2-3 point origination fee (depending on term) but we do NOT charge for appraisals, underwriters, document prep, or any of that! We don't even charge a pre-payment penalty if you pay off your note early. We try to only loan on projects that will be a win/win for us and the borrower. Very educational, thank you for sharing.
The difference between hard money and private lending is that hard money is backed by real estate collateral and are typically not credit based for decisions. Private money lending typically use credit as a determining factor and are not necessarily collateral based.
You are right about the contractors part. Im a contractor and nothing is getting done without a signed contract and a downpayment. A lot of "investors" dont like to pay and they come with all kinds of excuses. A lien on the property fixes the problem 🤣
Great subject, you are absolutely right about the Hard money lenders those things you talked about is never plainly explained by the HML, hopefully this information helps others make an informal decision if they chose to use a HML.
Thank you soooo much! Because the internet make it seem like the hard money release the rehab fees for the rehab. I just learned today the rehab fee is held in escrow.
Great video! The fees drive yield for the lender. This is one reason why I prefer to work with private money lenders. Though, if the deal is good enough I will borrow institutional hard money.
Great info. We defintly have to talk. I'm going to check out your link. I'm very experienced in rea estate (30 yrs) took a short hiatus a while back for personal reasons and of course covifld. Now 100% back in the game.
Most Hard Money Lenders list their fee's on their website. Many also have a calculator on their site that shows your upfront cost and profit. Yes you do need some funds for the rehab to pay for the work first, then pay for an inspection, then wait for the draws to deposit into your account, while still paying interest payments every month.
Most people that aren't investors don't understand complex financial deals. No mention of how quickly they can process a loan, which is extremely important. I've had a loan within 5 days!! Once a relationship is built, I get top tier terms that beat every bank. Also no mention that traditional banks and mortgage companies do not lend one penny for rehab costs. The interest only payments are just a part of the expense column for my accountant to deal with....the cost of doing business.
Thank you for your info. Wondering if you could give me advice. I am working with a Hard Money lender. I get the fact that the closing and interest costs are high. I am not a flipper. I need the loan to purchase a small townhouse which only cost $90,000. My father is loaning me $57,000. Hard lender loaning $33,000. My plan is to buy, move in, sell the condo I currently own which is worth between $150,000-$170,000. Then pay the first mortgage ($43,000) then this second mortgage. I HAVE QUESTIONS.............. Please help!!! I am concerned of signing papers which could mean lender gets my property. And also why is lender asking me to put him on my home owners insurance???
What's the best way to get a loan to buy a house you want to live in for only two years , repair, then sale? I cannot get financing because I am not a business/real estate entity and while I have good credit, the DTI is too high for traditional routes.
Hey, thank you so much for your videos. They're super helpful. I'm curious how the private money lending works. Theoretically let's say you're using that private money on a multi family, do you do a hard money loan after the renovations are done? How do you fund that after the year or so that you agreed upon with the private lender. Also, what are your thoughts on HELOC from one's current residence?
I thought the point of hard money lenders is that they loan u quick money, for around 6-9 months & u only have to pay the principal & interest after that time period in full
I completely inform my borrowers of all the costs on the first call. Only fees are origination, service fee and Title/Insurance costs. Rehab is escrowed with draws. Have had many successful projects
have u ever did asset based loan on commercial property, 2 million property, cash flow 180k annual , they said since is asset based property generating cash flow, all I need is origination fee and 4% ON the 2 million with monthly payments of 7k month for 2 yrs, after 2 yrs I have to pay the 2million is that correct ???
We are a private hard money lender in Texas and we do charge a 2-3 point origination fee (depending on term) but we do NOT charge for appraisals, underwriters, document prep, or any of that! We don't even charge a pre-payment penalty if you pay off your note early. We try to only loan on projects that will be a win/win for us and the borrower. Very educational, thank you for sharing.
Can you contact me?…I have multi family deals in the pipeline in Michigan
The difference between hard money and private lending is that hard money is backed by real estate collateral and are typically not credit based for decisions. Private money lending typically use credit as a determining factor and are not necessarily collateral based.
You are right about the contractors part. Im a contractor and nothing is getting done without a signed contract and a downpayment. A lot of "investors" dont like to pay and they come with all kinds of excuses. A lien on the property fixes the problem 🤣
Great subject, you are absolutely right about the Hard money lenders those things you talked about is never plainly explained by the HML, hopefully this information helps others make an informal decision if they chose to use a HML.
Great video! I learned so much, you did a great job of making that information easy to understand.
I can vouch the course on private money lending is SUPER legit 💯💯 tons of value inside! Appreciate the content as always brother 💪🏾
Thank you soooo much! Because the internet make it seem like the hard money release the rehab fees for the rehab. I just learned today the rehab fee is held in escrow.
Agreed for sure
I like how you added your course Add there lol😂
Great video! The fees drive yield for the lender. This is one reason why I prefer to work with private money lenders. Though, if the deal is good enough I will borrow institutional hard money.
Agreed for sure!
Thank you for sharing valuable information for those who are new in the real estate market
Great info. We defintly have to talk. I'm going to check out your link. I'm very experienced in rea estate (30 yrs) took a short hiatus a while back for personal reasons and of course covifld. Now 100% back in the game.
Time to blow up!
Most Hard Money Lenders list their fee's on their website. Many also have a calculator on their site that shows your upfront cost and profit. Yes you do need some funds for the rehab to pay for the work first, then pay for an inspection, then wait for the draws to deposit into your account, while still paying interest payments every month.
With private money you dont
Just sold a property today, arv was $320,000. Sold for $395k. Their arvs are always low, I think they do that on purpose
Sweet! Congrats they sure do!
u dis motivated me
Most people that aren't investors don't understand complex financial deals. No mention of how quickly they can process a loan, which is extremely important. I've had a loan within 5 days!! Once a relationship is built, I get top tier terms that beat every bank. Also no mention that traditional banks and mortgage companies do not lend one penny for rehab costs. The interest only payments are just a part of the expense column for my accountant to deal with....the cost of doing business.
Hard money can be good at times. I prefer 100% private money everything
Thank you for the video. I was under the impression that HML could also be obtained by banks.
Sometimes. PML is the best!
Thank you for your info. Wondering if you could give me advice. I am working with a Hard Money lender. I get the fact that the closing and interest costs are high. I am not a flipper. I need the loan to purchase a small townhouse which only cost $90,000. My father is loaning me $57,000. Hard lender loaning $33,000. My plan is to buy, move in, sell the condo I currently own which is worth between $150,000-$170,000. Then pay the first mortgage ($43,000) then this second mortgage. I HAVE QUESTIONS..............
Please help!!!
I am concerned of signing papers which could mean lender gets my property. And also why is lender asking me to put him on my home owners insurance???
What's the best way to get a loan to buy a house you want to live in for only two years , repair, then sale? I cannot get financing because I am not a business/real estate entity and while I have good credit, the DTI is too high for traditional routes.
Hey, thank you so much for your videos. They're super helpful. I'm curious how the private money lending works. Theoretically let's say you're using that private money on a multi family, do you do a hard money loan after the renovations are done? How do you fund that after the year or so that you agreed upon with the private lender. Also, what are your thoughts on HELOC from one's current residence?
I take it to long term bank debt once the project is done to pay off my private money lenders
Great Content 👍
I thought the point of hard money lenders is that they loan u quick money, for around 6-9 months & u only have to pay the principal & interest after that time period in full
I learnt that in regards to the BRRR strategy
Great tips! My question is, does this include major banks as well? Or is it just stand alone/private companies?
HML's only apply to stand alone/private companies. Banks do not offer these types of loans
wow thats crazy! :0 learned alot thank you bro
How to convince private money investors to fund your deals ???
I completely inform my borrowers of all the costs on the first call. Only fees are origination, service fee and Title/Insurance costs. Rehab is escrowed with draws. Have had many successful projects
Can all the fees be taken out of principal amount? Or is it an upfront cost?
@@MMeansNSTI fees are paid at the closing for Rehabs. They can be taken out of the principal for a refinance as long as there is enough to cover it.
@@johnkesinger2191 can I put in an application? I have a property in norcross Georgia I would like to buy that is cash flowing. Already has a tenant
What are the points you're speaking of?
each point is like $1000 for every $100k .. So if the loan is $300k and they want 3 point then you pay $3k
have u ever did asset based loan on commercial property, 2 million property, cash flow 180k annual , they said since is asset based property generating cash flow, all I need is origination fee and 4% ON the 2 million with monthly payments of 7k month for 2 yrs, after 2 yrs I have to pay the 2million is that correct ???
Awesome
The closing costs on hard money is damn near triple.
its expensive!
Nice, that's all I wanted to know, I guess that's a out for me, Robert Kiyosaki said it best, seek real teachers
Glad the video was beneficial 💪🏽
Austin! You broke everything down perfectly. You're smooth as hell. I started getting hypnotize. I think I have a crush on you. 🤣😊 #newsubbie
Who can recommend me private money lenders in Georgia?
Based on this video, I will never do Hard Money...
Private money is the best!
These are evil institutions
They’re all crooks
Dude your acting like only hard money loans do this stuff,a big bank does the same thing!
Agreed for sure. Private money is the best!