Archive

Posts Tagged ‘Hard Money Lending’

The Lure of Hard Money

July 29, 2011 Leave a comment

One of my favorite movies is Easy Money with Rodney Dangerfield and Joe Pesci.

The lure of easy money

Rodney’s character made a deal to give up all of his vices to inherit his mother-in-law’s fortune. It turned out to be harder than he imagined.

There is nothing “easy” about obtaining a Hard Money loan from a private lender. It is a proposition based on risk. The lender assumes the risk of repayment of a highly leveraged loan, the borrower assumes risk of paying up-front fees to someone who will not perform, and the brokers assume the risk of getting squeezed out of the deal. Hard money fees can be as high as 10 points with interest rates above 12% and upwards of 20%.

  Read more…