No penalty for a hard-money loan?

[CheebahBaby]

Yeah right. I ran into a guy I went to school with who's now a real estate investor and he started giving me some info about investing into some property. So he tells me about these hard-money lenders that don't put up the red tape like banks do, but the rates are killers; he explained the ltv and how the remodeling costs are factored in. Now the kicker is (from what I've gathered) the project has to be completed within a certain timeframe, but if not, I (as in borrower) can walk away without losing anything? This don't sound right. Can someone fill in the blanks and shed some real light to this?

 

[Deezz]

From what I understand, if you don't finish the project in the time frame alloted, you are going to loose your shirt. The rates are high because they know you are a "flipper" and they need to make money somehow.
The best thing to do with Hard Money loans is to only do it if you have very good credit. This way you can set up interest only payments or deferred payments.
If the project doesn't go as planned, maybe try a refi to get out from under the hard money lenders.
I had the site of a good/national hard money lender. If I remember it, I will post it. The owner of this company gave a 2hour presentation that I attended. It's a good deal as long as you hustle and complete the project as close to deadline as possible and then sell it quickly.

Here is the Hard Money lenders I was referring to:

http://www.rehabfunding.com/