Want to see if you can be a hard money lender? Take this test:

What follows is a true life (happened yesterday), example of a potential hard money deal.

Broker: Here is a nice loan for you. Property is a 10 unit apartment outside of Dallas, TX.
Property will appraise for about $1.3 million. Due to the fire, the owner just wants to sell the property and be done with it.

My buyer has negotiated a purchase price of $780,000 (which would be 60% LTV). He is a good borrower, with a 589 score.

Buyer intends to use $200,000 of the proceeds for fixing up the fire damaged units.

How fast can you fund this 60% LTV hard money loan? Buyer is a licensed contractor, and has already received numerous sub-contractor bids to fix up this property.

Expected time to re-model should be 2-3 months, at which time the buyer is simply going to sell the property for around $1.7 million or so. This will probably only be a 9 month loan for you.

OK - that's the hard money loan request. DEAL or NO DEAL?

send me an email with your answer: mailto: I have an answer to your hard money test

Good luck to all who answer.