 |
Don’t Be Confused by the Term
by: Amy E. Jones
September 2002
Private--or “hard money”--lenders are real estate
funds, pension funds, insurance companies or private
individuals with money available for investment. Some
have deep pockets while some have limited resources.
Based upon their own criteria, they lend this money,
primarily on a short-term basis, to borrowers who
use it for a variety of profitable purposes including
refinancing, development, acquisition and rehabbing
properties.
Don't be confused by the term "hard money."
It doesn't mean that this money is difficult to obtain.
Actually, it is some of the easiest money to procure.
So why is it called "hard" money, you ask?
Good question. In the world of finance, money is either
"hard" or "soft." Hard money has
definite terms and a defined repayment schedule. Softer
money has easier terms and a more flexible repayment
schedule (e.g., debt service subject to available
cash flow). In the case of private financing, the
terms for hard money loans are short-term with 50-70%
loan to values (LTV's), higher than market interest
rates, and include up front points.
Terms for these types of loans will vary from lender
to lender. Generally, a hard money lender will provide
a loan for 50% LTV on raw land and up to 70% LTV on
the finished product value of a property at an interest
rate of 12-16% for a period of six months to two years.
They will also charge between 5-10 points as an up
front financing fee. Some lenders will only charge
interest, while some will amortize their loans. Some
will lend interest, repair money, etc.; others won't.
Ultimately, when finding hard money lenders, you will
need to determine their terms and how they might fit
into your plans.
Website:
Just visiting or born ‘n raised - Learn all there
is to know about San Diego! www.signonsandiego.com
Movie:
Finding Nemo. Found to be good for the entire family!
Happy
Hour: Donovan's Steak & Chop House between
4-6pm. Expensive drinks, but the steak sandwiches
are free--Got beer?
Quotable
Quote: “The way to get started is to quit talking
and begin doing.” - Walt Disney
New Tech
Gadget: Verizon’s Samsung i700 PDA. Compact
unit with every feature rolled into one - phone, camera,
contacts, email, and the list goes on!
Restaurant:
Assaggio - 4th Ave, DT. Quaint, old Italian charm,
amazing flavors without the steep prices.
At Mentor Financial Group (“MFG”), our business is
to fund investments secured by trust deeds on commercial
real estate, including income producing properties
(i.e. apartments, office buildings, etc.), land and
development projects (i.e. construction loans, rehabs,
condo conversions, etc.) and non-owner occupied residential
properties.
Don’t waste time! Call us today at (619) 987-9477
and ask about our referral fees.
Click here for the printable version of this article.
back to top
|
|
|
