Wednesday, July 26, 2006

Private Mortgage Investors AKA Hard Money Lenders

What is a hard money loan? According to Wikepedia:

These are often used to finance projects that are unconventional, great deals, or where money is needed quickly. Typically hard money lenders will lend 70-80% of the value of the property regardless of the sales price (unlike banks). They will typically close loans in 2-7 days. Credit scores and income are often overlooked by hard money lenders, however they may ask to see a business plan or exit strategy for the project. They may get paid via points (e.g. 1 point equals one percent of the total amount borrowed), interest rate (10-20% per year is common), and an equitable interest. These will vary based on the size of the project and the agreed upon contract. Hard money lenders are collateral based and typically require first position on the property.

To find out more, buy and read Private Mortgage Investing by Teri B. Clark


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