Expert: Terrence Cullen - 9/24/2008

Question
I am purchasing(rescuing a colleague) a church for $1,050,000. What is a fair market interest rate for a previous owner with poor credit.  I'm willing to give them the opportunity to buy the property back within 2 yrs without default.

Answer
Harriette,
  Are you are "rescuing a colleague" or making a business loan?  Are you purchasing an active church or the building and grounds? I am not sure I understand the structure of your deal. But if you are making a loan to someone with bad credit these days you can charge whatever you want because there aren't any other sources of funds. Bridge loans are typically anywhere from 8%-16% with 2-6 points.
 
 If you need any more definitive info, I would have to understand the transaction better. Good Luck TC