What's more important, the cost of the money or the availability of the money?

I have had many dealings both customer related and personal with private lenders. It all boils down to the borrowers available options. Your particular deal of about 10% is par for the road for hard money. If it's your only option and the is very little hassle with the application process then go for it. 

John, that's ridiculous-- no reason you should be expected to participate. There's a guy in your area we've worked with for 15 years. I'll message you his contact information.

You either do the deal or you don't. The guy with the money has the upper hand.

I have never worked with one.

Honestly, if the buyer needs private financing and they're willing to pay 10% interest (the $10K), then whether it's reasonable is up to the buyer. 

I might also suggest getting quotes from other private lenders.

My investment business started with private lenders, fortunately I never had to pay a premium like this.  Some charged higher interest, some a piece of the profit, but all worked well with me and helped me to grow.

That is like 10 points and that is crazy. Here the average is 3 points and 12% interest on hard money. It could go up to 18% for more risky or a new investor. The highest points i have seen are 5

Easy... I have no such experience. At the end of the day what is or isn't reasonable depends on the value of owning the property to the buyer.

Network with multiple lenders, see what they can offer you 

I would if I had but I haven't!

Sorry, I don't have any experience in that area.  I'm glad Candice A. Donofrio was able to help you though!

 In my experience, it's always a higher rate, and/or a lower LTV.   Not 10 points up front.  Yikes!

Seems about right for a hard money loan (even cheap), but I don't have much experience with private lenders.

John,

Looks like Candice A. Donofrio has an answer for you..  All the best.  A

Keep shopping it. This sounds unreasonably high to me.

Sounds like you should keep shopping!

Some of them will try to take advantage of people that can't qualify for traditional financing. I would shop around. Here we have "Farm Credit of Virginia's" for example that do land loans. Try to negotiate the fee, pass the fee on to the buyer, or shop around for another lender. Is the final value of the property worth investing the $10,000.00 in?

Depends on your end game and how reasonable your end game is...if paying that premium is your only or best option in acquiring this property.

(After reading your other comment, I'm guessing that I don't have the whole story.)

Compare his offer with your alternatives. I would talk with a local banker.

Hard money lenders set their terms. The buyer can either take it or leave it. If there wasn't a market for those types of loans at those fees, they wouldn't be offering it.

When I look at "reasonable" my first thought is ... depends.  If that is the only way you can get the home sold ... and the buyer is okay with the premium ... then it would lean towards being reasonable as it was agreed to. 

Over my career in the business, "owner finacing ' has been rather limited(representing buyers or sellers).  Each "deal" has its own merits.

Dave has the right thoughts on this situation....

John Mosier Hard money lenders charge whatever they can get. Asking you to pay the premium is unheard of in my area. I would walk. He may call you back with better terms.

I don't use those types of lenders in my business model.

I did private lending and the biggest dynamic is that they/we move at our own speed and arrive at our own values. End result: take it or leave it

I don't have any experience with them.

How reasonable?

Not enough data.

However, that $10,000 is not uncommon in private lending situations.

More money is made through lending than facilitating the buying and selling of real estate.

I have not.

Have never had this experience.

10% for hard money sounds about right on the couple of deals I had.

My experience is that private lenders earn a premium simply because they can charge it and get it. Other lenders generally won't touch it. Weigh the options and bite the bullet.

So basically 17%? it is regular for locals. Depends on the lender, but it is from 8 to 24% and up, depends how short/long, how much money loaned, etc. 

Only 2 times and both without an issue