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

What’s the Difference between a Hard Money Loan and a Private Money Loan?

You’re buying a property and your bank financing is turned down. Your real estate agent might  recommend you find a hard money loan to close the transaction. Searching online, you notice a lot of information for hard money loans, and additional information about something called private money loans — which seem like the same thing. And you’d be mostly right. But while they’re very similar, there are some differences between the two terms.

Picture of Ted Spradlin Ted Spradlin Jan 10, 2023 6:19:20 AM

Loan Scenario – 85/15 Seller Financing Plus Hard Money Second Mortgage

A homebuyer secured a seller-financed first mortgage at 85% Loan-To-Value (LTV) and asked if FCTD could provide a hard money second mortgage for the down payment, closing costs and moving expenses. In essence, they were asking if FCTD could help with a zero down payment transaction comprised of an 85/15 seller financing, plus hard money second mortgage debt stack.

Picture of Ted Spradlin Ted Spradlin Jan 2, 2023 10:38:17 AM

Loan Scenario: Hard Money For Commercial Property at Foreclosure Auction

During the real estate downturn of 2008-2012, many investors flocked to foreclosed commercial property auctions on the county courthouse steps. They could acquire properties that were deeply discounted from their 2005-2007 prices. Many of these same investors, along with new participants, are now gearing up again for an increase in distressed properties —and have reached out to FCTD to secure the hard money financing to do so.

Picture of Ted Spradlin Ted Spradlin Dec 27, 2022 8:03:26 AM

Most Hard Money Loans Have a Personal Guaranty

If you’re seeking private financing for your real estate project, be aware that most hard money loans have a document called a Personal Guaranty. This means that even if the loan is technically for an entity that you own or control, such as a limited liability company (LLC) or corporation, you, and possibly all the partners in the entity, must individually guarantee full repayment of the loan.

Picture of Ted Spradlin Ted Spradlin Dec 26, 2022 4:18:17 PM

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

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

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