They are not going to break your arm if you do not pay(though there may be some). But they are in business to make money and should not hesitate to foreclose and/or take the property. Many are private lenders that do so through personal contacts or mortgage brokers.
They have their place. It is more rewarding when you don’t have to pay high fees, points or interest to someone for the use of the cash. Next to finding and selling it should be a top priority to be able to self fund.
Posted by Karen McCall on October 13, 1998 at 07:12:06:
Hard Money is money lent on the value of the home. I would use it if there is plenty of equity in the home and I want a quick close not to mention if your debt to income ratio is out of range for a regular loan this works great.
I spoke with a guy last week. He’s a very wealthy and successful real estate investor who also has access to private money. He warned me not to use “hard money”. I asked him why and he responded by asking me if I knew what a shyster (spelling ??) was. He explained that hard money came from loan sharks and if you missed a payment - well, he left the rest up to my imagination. Ever since then, I’ve kind of been shying away from the “hard money” ads. But, is this necessarily true? That hard money is from loan sharks? And does it really matter?
Posted by Karen McCall on October 13, 1998 at 14:06:40:
Sounds like he’s warning you against what he does…most investors using private funds (i. e. “Hard Money”) usually get the money based on the equity in the house.
However there are Crooks in every field so caution is always prudent.