Some notes have large interest rates, is it because the borrowers have bad credit, or do the properties have problems?

Some notes have large interest rates, is it because the borrowers have bad credit, or do the properties have problems?

Interest rates are one way a bank can make money when underwriting a loan. Banks are limited on the amount of fees they can charge. When banks loan on small balance real estate they cannot make sufficient money on fees alone. They increase the interest rate to enable them to make sufficient money.

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