5% fixed for 30 years. A strange, unknown hard money lender offers you 55% LTV at 14% for two years. Which one is the con man? I hope by now you will immediately say the first offer.
But be very careful of the lightning fast loan commitment at outrageous rates based on 50% of "quick sale value." What the heck is quick sale value? There is no enforceable definition in the law.
The lender will charge you a $200,000 commitment fee for a $10 million commercial loan, as long as the loan does not exceed 50% of quick sale value.
When the appraiser goes out, he values your $20 million resort at just $7 million on a quick sale basis. 5 million loan, when you owe $7 million. When you decline it, the lender keeps your $200,000 deposit and blames you for over-valuing your property.
The Chinese people distrust banks for historical reasons. They therefore keep much of their savings in real estate. Continue reading "Economics: A Tidal Wave of Economic Poop May Be Coming From China"