Information seeked, not a head hunter !

[Charles France]

I joined this web site hoping to gain knowledge, wisdom and some advice. To my disappointment anytime I ask or want to gain knowledge I am propositioned by people who just want to make money. I also want to make money. And when I am in a position to help someone, I do just that. I help. I also understand making money and am willing to put money in someone’s pocket but not make them rich off one deal.

I say all the above to say this. 

I purchased a home in June of 2017, and when I got the loan, the loan officer asked me not to sell the property till the mortgage got sold otherwise he would suffer penalties. The loan sold to a bank by August, I made payments to the new bank in sept, oct, and November. I have sold the property and am set to close November 28th. So I have been looking at new properties and I have found one. I called my lender and he said he will not do a loan cause he did not make money. Maybe that is true for I am just a regular joe and don’t know too much except I have a dream of flipping homes. My loan was for 60k w 20% down. ( small loan ). 

In 2004 I started my dream. I started with small loans and small properties and by 2008 I had done 12 properties. The first few were small but then I got bigger and bigger loans and houses. I want to do that again but 2008 hit and real estate took a plunge as you may well know, I went through a divorce and got full custody of my four kids. Well needless to say it took me these ten years to start again. I have to start small and slowly get back to where I was. I sold the property for 129k and I will walk with 70k, after paying taxes and my credit cards off that it took to do the rehabbing, I stand to have about 40k left. That’s actually what I made. So what do I do now !?! The lender won’t give me a loan if it’s so small or if I do t hold it for a year, yet I dont have enough cash to purchase a property out right and do the renovations. Please give me some solid advice. I have had plenty of people on here wanting to give me money for a ridiculous return. I understand wanting to make money but the amount that was proposed makes me see why they have “bigger pockets” yet it does not give people such as myself much of a chance at the dream. 

I appreciate any good hearted advice and wisdom. 

Thank you !

[Jon Holdman]

The problem is that you're using long term loans for short term projects.  Conventional loans are intended to be kept in place for multiple years.  The money your loan officer earns from the loan is based on the assumption that the loan is in place for several years, at least.  So, when you get the loan then the loan officer sells it, there may be terms in place that say if the loan is paid off quickly that the loan officer must repay some of his fees to the person or company that bought the loan.

There are loans for the type of deals you're doing - hard money.  The rates are much, much higher than conventional loans - typically 12%+ and several points.  That's because the loans come and go quickly, yet much of the same work must be done as for a long term loan. 

Even at 12% and (say) four points, a $60K loan for six months has total interest plus points of only $6000.  There's real risk involved here, and non-trivial effort to set it up, inspect the work, collect the payments, and then release the loan.  Is it worth $6000 vs. perhaps $2400 you might pay on a conventional loan you keep for six months?  Maybe not.  But that's the way the business works.

If you get e-mail or personal messages that are offering products or services you did not ask for, please report those.  The ONLY place to ask for a loan on this site is in the Marketplace.  Anyone who sends you a message offering a loan as a result of this post is violating the terms of service and rules for this site.  We take such violations seriously.  But you need to bring them to our attention.