Need hard money option

Personal Loans
1

Hallo,

I’m in a bit of a jam and could really use some advice on hard money options. A borrower I’m working with did a fix-and-flip at the start of 2023, but the renovations went way over budget. They had to finance the repairs with credit cards, and now their credit score is sitting at 588. They owe $158k on a 2-unit property, and a recent (not-so-great) appraisal came back at $278k. The original appraisal was $376k, but that was supposed to be after the renovations.
I’m trying to find some hard money options to help pay off that fix-and-flip loan. The lenders are really pushing her to get it paid off, and we had a file ready that would have worked with no credit or income requirements—just needed to be at 50 LTV, but that appraisal really messed things up

In anticipation…

2

One kind of private financing that is frequently utilized in real estate transactions is hard money. It is frequently used to finance a purchase or refinance an existing loan, and it is usually secured by the borrower’s property.

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Investors who are unable to qualify for a standard bank loan or who need to close a deal swiftly usually turn to hard money loans :heart_eyes:. Borrowers who require a sizable loan amount or who have bad credit also frequently employ them.

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Compared to conventional bank loans, hard money loans usually have shorter repayment periods and higher interest rates. :roll_eyes: Additionally, if the borrower defaults on the loan, the lender may foreclose on the property, making them riskier for the borrower.

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It’s crucial to carefully balance the advantages and disadvantages of a hard money loan. While some borrowers may find hard money loans to be a desirable alternative, not everyone is a good fit for them.

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If you are considering a hard money loan, it is important to shop around and compare rates from different lenders. You should also make sure that you understand the risks involved and that you can afford the monthly payments.