Grab Hard Money Loan Transform Your Rehab Success
Cost Considerations and Financial Implications
While hard money loans offer substantial benefits, it's essential to be aware of the costs involved. Interest rates on these loans are generally higher than those of conventional loans, often ranging from 8% to 15%4. Additionally, lenders may charge origination fees, which can be 1% to 3% of the loan amount. These costs reflect the higher risk taken by lenders and the convenience of fast access to capital.
Despite the higher costs, the potential returns on investment can be substantial. By completing rehab projects quickly and efficiently, investors can sell properties at a profit or refinance into a more traditional, lower-interest loan once the property's value has increased.