I am looking at an auction property, and have kicked around the idea of using hard money, but have never done it. I have a friend (of a friend) who is loaded, and we pitched the concept of using his money on a couple of deals. He is very open to this, and I am pretty sure that he would go for it. I have been scouring the internet looking for a sample hard money contract that I can modify or at least take a look at, but can't find one. Does anyone know where I could find one, or does somebody have an example they could email me? Any help would be greatly appreciated!!

Typically hard money is a loan on property valued well above the amount you need to borrow. As a lender he would just need a deed to secure debt or whatever you use in your state to secure a loan.
Most hard money lenders will lend up to 70% of the value not based on your credit but based on the value of the property. If they have to foreclose they have made 30% on the money or probably more like 20% because of the costs involved in foreclosure and resale.

__________________
Wayne Long
Search all the Columbus Ga Homes for Sale listed in the Columbus MLS
as well as Fort Benning Real Estate and area info.
Check out the Columbus GA Real Estate and area info.

I am not sure which state you are in as it matters how the promissory note will be drawn up. You should have a real estate attorney do this for you. A typical hard money loan will be simple interest only with a rate of around 15% and a balloon payment after 12 months. At least this is what I have seen. I have seen them go higher than 70%, but, you are asking for trouble with these guys as rates are higher. If your friend is willing to do this, the loan will be secured by the property and he will hold title as the lender until the loan has been paid. You may be able to negotiate a lower rate or higher ltv. If I were him, I might just by it myself as we all should by almost any property if we can get it at 70% of the value.

__________________
Ryan Ward, REALTOR® - Keller Williams Realty Consultants. (404) 630-3187
Atlanta Real Estate - My featured area is Alpharetta Real Estate and it is where I call home. Read my Atlanta Real Estate blog.

Notty: There's a couple of questions you may want to ask yourself and talk over with your friend before you go the route of hard money, which is usually regarded as the last option or school of last resort for purchasing property. Hard money has been called "Loan To Own" for obvious reasons and is really the last option!

The first one might be: Could your friend get a conventional loan at a lower rate or could you to buy the property? The second question is What type of profit is there in this property and along with that is it profitable enough to pay the higher interest on the mortgage and still come out way ahead?

Whatever the case have an attorney draw up the agreement to handle it if you go the hard money route.

__________________
Mike
http://www.HousingPredictor.com
http://www.DestinFloridaRE.com
http://www.RealEstateDomain.com

Spam

What are your terms??

__________________
Wayne Long
Search all the Columbus Ga Homes for Sale listed in the Columbus MLS
as well as Fort Benning Real Estate and area info.
Check out the Columbus GA Real Estate and area info.

You need an attorney.

go to a Mortgage Broker, they will usually have a list of people with plenty of money..
if you're in the bay area maybe I can Lend you some hard cold $$

__________________
Bay Area Real Estate | Free MLS. Coming to CA and like to know Things to do in California.