S5E10: Hard Money 2.0: The Real Costs, Risks & Strategies for Real Estate Loans | Investor Shed Podcast

Welcome back to another episode of the Investor Shed Podcast with Nick Beveridge and Jeremy Kitchen! In this deep-dive follow-up to our original hard money episode, we're breaking down exactly how hard money loans work, what they really cost, and what new and experienced investors should know before using one.

We cover every hidden fee, including reconveyance, appraisals, draw fees, and the cost of extending your loan. You’ll also learn how to structure deals to avoid losing thousands in unexpected costs — and how hard money can be a powerful tool (or a trap) depending on your experience level.

Whether you're flipping homes, BRRRRing rentals, or considering becoming a lender yourself, this episode gives you the tactical knowledge to protect your margins and avoid costly surprises.

🎯 What You'll Learn: ✔️ The true cost breakdown of hard money loans (with real math) ✔️ How points, fees, and interest add up — fast ✔️ The Five C’s of Lending: Credit, Cash, Credentials, Character, Collateral ✔️ How lenders think, what they look for, and how they mitigate risk ✔️ When hard money is a smart tool — and when it’s not ✔️ How reconveyance, draw, and escrow fees work ✔️ Real estate investing tips to plan smarter and flip with confidence ✔️ Should you partner, or just borrow? Pros and cons discussed ✔️ Using spreadsheets to analyze and track deal profitability

📢 Clarification on Rates: In the episode, we briefly mention some hard money lenders offering 3%–4% interest — that was a mistake. 👉 Typical hard money rates are 8%–14%, depending on experience, deal quality, and loan terms. Rates significantly lower than that are either:

• From private individuals, not professional lenders

• Structured with high backend fees, or

• From inexperienced lenders not fully accounting for risk

Always ask for a full fee schedule, including extension fees and penalties. Never evaluate a hard money loan by interest rate alone.

💡 Pro Tip: A solid rule of thumb: Expect 10% of your loan amount in total fees if you hold the property for about six months. Plan accordingly — and run the numbers before you close.

⏱️ Chapters: 00:00 – Introduction and Overview of Hard Money Loans 05:57 – Who Uses Hard Money Loans and Why? 11:51 – The Five C’s of Hard Money Lending 17:59 – Analyzing Hard Money Loan Examples 25:04 – The Role of Appraisals and Broker's Price Opinions 30:48 – Reconveyance and Payoff Fees Explained 35:57 – Building Relationships as a Lender 41:52 – Understanding the Costs of Flipping Properties

🔗 Connect with us:

Official YouTube Podcast Page: https://www.youtube.com/@TheInvestorShed Nick Beveridge's YouTube Page: https://www.youtube.com/@NickBeveridge Real Estate Website: northidahorei.com Facebook: https://www.facebook.com/profile.php?id=100063653307069 Instagram: https://www.instagram.com/theinvestorshed/

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