South Dakota Commercial Hard Money Loans

Craig is an entrepreneur in Rapid City, SD. He decides to purchase a new retail space for his business but he is not able to obtain a commercial mortgage from his bank due to his subpar FICO score. He looks to Rehabbers Lending Company for a commercial private money loan to close the transaction. The new property will cost $880,000. Because there is a 65% loan-to-value (LTV) stipulated by the lender, the loan principle amount will be $572,000. The remaining $308,000 will be be paid by the borrower. The lender additionally requires the following terms of the deal: 1) a 8% interest rate, 2) a 5 year length with interest only payments to be paid monthly, 3) an origination fee of 4 percent paid by the borrower at closing, and 4) no pre-payment penalty. Craig may eliminate the loan at any point in time if he pays off the $572,000 in principle, however, he will have to pay $3,813 monthly interest payments ($572,000 principle value x 8% interest / 12 months in a year) in the meantime, or until the loan expires. Because there is no pre-payment penalty, the only other cost he will have to pay is the $22,880 origination fee which he will contribute at the close.

Jeffrey owns a business in Rapid City, SD and needs to purchase a new warehouse for his operations. Since he cannot get a conventional mortgage loan from a bank, he looks to Presitge Investment Company for a commercial hard money loan. The list price of the new property is $1,220,000 and the lending company agrees to fund 85% of the cost (the loan to value / "LTV"), or $1,037,000. The other $183,000 will need to be paid by the borrower when the deal closes. The parameters of the loan include a 3 year term, a 8% rate of interest, and 3 origination points to be paid by the borrower when the deal is executed. By the parameters of the deal, Jeffrey will pay an origination fee of $31,110 when the deal closes. He will also begin to make payments of $6,913 / month throughout the duration of the note and will re-pay the principle at the end of the 3 year loan term. Should he decide to re-pay the note earlier, he can do so with no additional expense since there isn't a pre-payment penalty attached to the deal.