Avatar's Blog
» Hard Money Mistakes - #2
Posted on 11/23/2004
Expecting to get 100% LTV financing on commercial or investment residential properties.
Hard money lenders lend on commercial and investment residential properties - some lend on raw land as well, but they tend to lend up to 65% LTV with "v" or "value" being defined as the lesser of the actual price you are paying for the property or the appraised value. If you are buying a property for $1,000,000 and it is appraised at $2,000,000, you are getting a good deal, but you will still only get $650,000 on a hard money loan.
Of course, there are few lenders who will step up to a slightly higher amount, but expect to pay 8, 10 or more points up front for that priviledge and as much as 20%+ interest rates. The risk is large and the lender will charge accordingly.
Posted in Miscellaneous
Hard money lenders lend on commercial and investment residential properties - some lend on raw land as well, but they tend to lend up to 65% LTV with "v" or "value" being defined as the lesser of the actual price you are paying for the property or the appraised value. If you are buying a property for $1,000,000 and it is appraised at $2,000,000, you are getting a good deal, but you will still only get $650,000 on a hard money loan.
Of course, there are few lenders who will step up to a slightly higher amount, but expect to pay 8, 10 or more points up front for that priviledge and as much as 20%+ interest rates. The risk is large and the lender will charge accordingly.
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