Finding Funding for New Investors

[Exavier Hamilton]

I come across a ton of new investors who are searching for funding in all the wrong places.  Their either cutting back on living expenses to obtain a property with savings.  Their either going to banks and discovering that they don't qualify due to their credit or debt-to-income ratio.  For those of you going through these situation you need to look into private money lenders.  Their goal is to fund your initial investment long enough for you to correct your financial past while creating a stream of income to do it with.  

There's plenty of products from business purpose loans to long term hard money products that can get you going.  Just make sure your investing those funds properly.  One thing I'm seeing with the newer inexperienced investors is that they love fix and flips but don't have the money to fix in order to flip.  Lenders view fix and flips as potential investment hazards because their only as good as the contractor.  Deferred rehabs have put a bad taste in lenders mouths therefore it's harder to receive funding for those types of projects.  They'll rather lend on a completed property and fund in 5 days.  Where a fix and flip usually have to go through a series of questions before funding is even considered.  

Moral of the post:  If your credit score is below a 680 and your looking for funding stop getting turned down by banks and look into private lenders.  Those credit inquiries not only hurt your credit score they make you look desperate to potential lenders which is a red flag with banks.   Go where you know you'll get approved despite your credit history and borrow responsibly on a property that's ready rather than one that's not.

Hope this helps - Exavier

[LeAnna Davis]

So, Exavier Hamilton , what types of properties are PMLs most likely to fund you on?  My original thinking was that fix and flips would be the quickest way for them to make a profit... but you said they have left a bad taste in PMLs mouths?  I can see why.  So in your opinion which would they be more likely to consider funding you on and how can you convince them you have a good deal?

[Exavier Hamilton]

Great questions LeAnna,

PML's are lending more on the Non Owner Occupied side if your looking for an REI. Less regulation especially if your dealing with a direct lender. Direct lenders can fund you with out proof of income, employment, documentation and credit if the property is a good investment. It's all about marketable interest, if the lender has to potentially take the property back will they be able to sell. The easier it is to sell the more interesting the property is to PML's.