Answers - Real Estate

Make hard money loans and you get a high rate of return on your cash. You have to do it properly to be safe, of course. You also need a lot of money to invest to do this.

What are "hard mon

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

ey" loans? They are short-term loans (usually 24 months or less) made to real estate investors, usually so they can purchase and rehab a property. There is often a loan fee of as much as fiv

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

e percent or more of the loan amount, and up to fifteen percent or more annual interest. Why do they want these loans?

Hard money means speed and simplicity. When using hard money lenders,

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

an investor can tell a seller "I can close for cash in a week." That gets the seller's attention, especially if he has had offers that have fallen through due to financing contingencies.

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

>Hard Money - How It Works

An investor can usually borrow 65% to 70% of the property value, but not just the current value. As a hard money lender, you'll loan money based on the ARV, o

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

r "after repair value" (as determined by your appraiser). You'll look at the property, more than credit scores, another reason investors will come to you. Let's look at an example.

An inves

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

tor finds a beat-up house that he can buy for $105,000. He has a plan that when complete will bring it up to a market value of $182,000. He figures it will take a month to complete, and two

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

onths more to sell it. He comes to you, and you agree that his projections seem reasonable. Your appraiser estimates a $186,000 market value when the project is done.

You agree to loan him

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

65% of the ARV, which amounts to $120,250. The excess beyond the $105,000 purchase price (about $15,000) goes into an escrow account, to be doled out as the repairs begin. Notice that if thi

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

s investor keeps his costs down, he might do this whole project without any of his own cash invested.

The 4% loan fee you charge is $4,810, and is added to the loan balance, so the investor

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

owes you a total of $125,060. You are charging him 15% interest, and he can pay just the interest due each month, but the whole balance is due within one year. If it takes longer than that

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

and you have confidence in his plan, you might do another loan after that.

For the sake of our example, we'll suppose that it takes Two months to finish the house, and two months to sell it

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

. The investor gets $181,000 for it. He paid $105,000, and he made a profit of $31,000 after a total of $45,000 for all of his expenses. he is happy. Now let's look at what part of those "ex

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

penses" went to you.

You had the buyer pay for the appraisal and any other costs of closing the loan, so your total investment was $120,250. This was repaid when the house sold, along with

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

he loan fee of $4,810. You also collected four months of interest on the whole balance of $125,060 (the loan and the fee that was also financed), which totals $6253. Your total profit then w

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

as $11,063 on an four-month investment of $120,250. That's an annual rate of return of 27.6%. How many banks make that on their loans?

Does that seem like a lot for the investor to pay? Wel

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

l it is, but the interest rate and other fees are irrelevant if they allow you to make a good profit. Remember that he made $31,000 after paying those expenses. In any case it makes sense th

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

at hard money lenders get paid well to take risks that banks won't take. If he screwed up the project, stopped paying, and you had to foreclose, you might be selling a half-finished house fo

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

r just enough to get your money back.

Suppose you keep most of your money out there in these kinds of loans. Since it isn't all invested all the time, and is making only 5% in the bank, you

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

average just an 18% return. What does that do to a $200,000 investment portfolio in 12 years? It makes it into 1.6 million dollars. You can see why investors with cash make hard money loans

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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Low cost promotional products are frequently used as giveaways at events, such as trade shows, conferences, sporting events or fundraising events, where they can be handed out in large numbers to promote a company and to raise brand awareness.

Although there are a vast amount of Internet marketing tools available, unless you use these tools properly, you efforts will not yield optimum results.

Unemployed people need quick loan approvals. Since there is no source of income, finances become very important to them. Unless there is quick help in the form of loans for the unemployed, their debt level will get deep very fast. So, unlike normal borrowers, fast loans are a dire necessity for jobless people.

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