Hard Money lenders want at least 10%. That can cut in to your profit if it is not a quick use with a speedy payback. We have been working on a deal, a short sale, and figured a return of a little over $700. a month after all costs. The property had rent returns of $2,345. We thought our private money lender would lend at 6% because of a previous deal. When we finally figured out the facts of the loan with our P.M.L. getting 6%, our private money lender asked for 10%. Taking out another 4% left us a profit of only $283. a month. For that much profit I think we should pass and put less money into a smaller purchase and a higher return. Unless of course we can find someone who is willing to make 6% on a fifty thousand dollar loan, for a longer term then one year. Its better then getting 1 1/2 % on a CD. So that is what we are looking for a medium money lender.
Hard Money lenders want at least 10%. That can cut in to your profit if it is not a quick use with a speedy payback. We have been working on a deal, a short sale, and figured a return of a little over $700. a month after all costs. The property had rent returns of $2,345. We thought our private money lender would lend at 6% because of a previous deal. When we finally figured out the facts of the loan with our P.M.L. getting 6%, our private money lender asked for 10%. Taking out another 4% left us a profit of only $283. a month. For that much profit I think we should pass and put less money into a smaller purchase and a higher return. Unless of course we can find someone who is willing to make 6% on a fifty thousand dollar loan, for a longer term then one year. Its better then getting 1 1/2 % on a CD. So that is what we are looking for a medium money lender.
Charisse