Hard Money

With home prices and interest rates down there are a lot of people looking for Hard Money.  What I have seen the most of is residential rehab hard money requests.  It seems with all the bank foreclosures many investors are buying up properties.

How Residential Hard Money Works:

Property and Rehab costs must remain under 60% of the "As Completed" Value.  Many lenders and brokers are advertising LTV's up to 70%.  Realistically money is borrowed at up to 65% LTV but this must include the fees.  Fees on rehab hard money can be as high as 5% to 10%. 

It does seem expensive but it is high risk money coming from high risk lenders.  There are other ways to finance rehabs.  However, hard money is easier to qualify for and the cost is just the cost of doing business.

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