Читать книгу Flipping Houses For Dummies онлайн

87 страница из 103

The big benefit to hard money loans is that you avoid the hassles associated with traditional bank loans. In fact, you can often qualify for a hard money loan when you can’t qualify for traditional loans. But it’s called hard money for a reason — actually, for several reasons:

 Hard money lenders don’t care as much about your personal income and expenses or your credit score. They want to know that if you default on the loan, they get a property they can sell for 20 to 40 percent or more than what you borrowed.

 As the borrower, you typically pay two to ten points up front — money you’ll never see again — so if you borrow $200,000, you can expect to pay $4,000 to $20,000 up front, just for the privilege of gaining access to cash.

 Private lenders charge much higher interest rates than banks do — sometimes double or triple what banks charge — so if bank loans are at 4 percent, you might be paying a private lender 8 to 12 percent. Private lenders can charge these high rates because they’re loaning money to you as an investment opportunity. If you were living in the property, private lenders couldn’t charge you these rates. Lending at those rates is considered to be usury, which is illegal (unless you’re a major credit card company).