FCTD Blog

Current updates on the real estate market, private money, hard money, and trust deed investing.

Posts by

Ted Spradlin

Ted is the managing broker for FCTD with 20+ years mortgage industry experience. His focus is bridge loans and long-term rental financing.

How Does a Hard Money Interest Reserve Work?

If you’re taking out a hard money loan, one thing to consider is setting up an interest reserve to cover the monthly payments for a few months or for the entirety of the loan, whichever you prefer. An interest reserve can be a great tool for managing the cashflow of a project, allowing an investor more time to focus on the building rather than the finances.

Picture of Ted Spradlin Ted Spradlin Oct 11, 2022 8:26:48 AM

What is a Hard Money Loan Balloon Payment?

A hard money loan balloon payment is the total principal balance of the loan plus one monthly payment due in full at the end of the loan term, which is usually 6-24 months from the start of the loan. Balloon payments are a common feature of hard money loans as most are short-term bridge loans with interest-only payments rather than 30-year amortizing loans like conventional mortgages.  

Picture of Ted Spradlin Ted Spradlin Oct 11, 2022 5:24:37 AM

How Does a Hard Money Loan Prepayment Penalty Work?

If you’re new to hard money lending, it’s good to know how the prepayment penalty works, which can be different than with traditional financing like bank loans or NonQM loans. This blog post will explain the difference between traditional prepayment penalties and the two hard money loan prepayment penalty types that you're most likely to see on a bridge loan and longer-term loan. 

Picture of Ted Spradlin Ted Spradlin Oct 9, 2022 9:40:57 AM

Hard Money Loans – Direct Lender or Mortgage Broker?

When using hard money loans, is it best to work with a direct lender or a mortgage broker? This is a question that real estate investors, who have been using hard money loans off and on over the years, probably think about from time to time. It’s also a question I get asked, as a hard money mortgage broker, by borrowers wanting to know if it makes sense for them to work with me or to “cut out the middleman” and go direct to the money source.

Picture of Ted Spradlin Ted Spradlin Oct 2, 2022 3:10:52 PM

The Different Types of Hard Money Loans

If you’re new to hard money lending, you’re probably not aware of the many different types of hard money loans that real estate investors regularly use to finance new acquisitions and to make renovations to existing properties. This growing segment of the mortgage market continues to provide capital for properties that are not bank financeable due to their condition or to high vacancy rates. Hard money loans are used all the time but their usage outside the real estate industry is not widely known or understood.

Picture of Ted Spradlin Ted Spradlin Oct 1, 2022 5:03:47 PM

The Different Types of Hard Money Lenders

When most people think of hard money lenders, including real estate agents, conventional mortgage brokers, escrow and title officers, they mostly think of an individual investor who funds a few loans per year or a local hard money lending company that funds fix and flip transactions. The reality is that the industry has expanded significantly beyond local lenders to nationwide hard money lenders originating loans and selling to pension funds and Wall Street investors, which has led to greater loan product offerings for the end user, the real estate investor.

Picture of Ted Spradlin Ted Spradlin Sep 30, 2022 8:45:34 AM

What is a Hard Money Loan?

A hard money loan is a short-term asset-based, or equity-based, loan secured by real estate and funded by a private investor, or multiple private investors, as opposed to being funded by conventional lenders such as banks or credit unions. Hard money loans are generally used by real estate investors as a short-term bridge loan with a duration of three months to three years, after which the investor will either sell or refinance the property.

Picture of Ted Spradlin Ted Spradlin Sep 29, 2022 6:00:29 AM

Guide to Trust Deed Investing

If you are a seasoned investor, you have probably heard about hard money loans and trust deed investing. Maybe you have friends who have diversified their investment portfolio by loaning money out to real estate investors on a project. Or, maybe you personally have borrowed from a hard money lender on one of your real estate projects and “being the bank” caught your attention, so here you are wanting to learn more about how you can do the same thing with your capital.

Picture of Ted Spradlin Ted Spradlin Sep 27, 2022 11:04:09 AM

Why Do People Use Hard Money Loans? 20 Examples

A little while back, I had a conversation with a friend rolling $250,000 from their 401K into an IRA after leaving the company they’d worked at for eleven years. The friend was asking me about setting up a Self-Directed IRA for trust deed investing, lending the money out at 9.00-10.00% compared to simply rolling their retirement money into a Roth IRA with Vanguard.

Picture of Ted Spradlin Ted Spradlin Sep 18, 2022 12:42:28 PM

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