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How to Use Hard Money Lenders...
By Mark Walters
Apr 30, 2005, 13:54
How to Use Hard Money Lenders...
When purchasing a house you're looking to sell quickly, investors often will use a hard moneylender.
This is someone who loans money while charging very high fees and points. Investors are often willing to pay these high prices for quick cash because they will have short holding periods and the pay off is worth it.
Here is a simple rule of thumb on how to calculate costs to know whether or not the deal makes monetary sense.
a. Hard moneylender charges 5% (this fee can vary greatly).
b. Closing costs between $5-8K (again fees will vary).
c. General fix up average $13K.
d. 5 months (12%) holding period to sell.
e. 6% Realtor fees.
It's important to over estimate the costs so that you don't find yourself on the short end of the money once your deal commences.
About The Author - Mark Walters has written
"The Last Great Real Estate Secret".
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