Recommendations for a hard money lender in Illinois?-New investor

Chicago, Illinois
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Recommendations for a hard money lender in Illinois?-New investor

Faiz Kanash
Member since 2022 · 36 posts · 26 votes

Hey guys,

I was hoping someone would be able to recommend me a hard money lender in Illinois(I'm in chicago). I don't have experience, and currently looking to do a fix and flip on single family homes. I'm shadowing a friend of mine who's been doing this for years, he's going to be the one that is going to be guiding me through mostly everything on my first property investment so i'm not going in blind here. I was hoping if anyone had any recommendations for a hard money lender that would work with someone with no experience? I have high credit(730+) and enough savings to cover rehab and downpayments. I'm also looking for a loan provider that preferably doesn't have any prepayment penalties. I don't have any property i'm committed to right now, wanted to ensure I could get pre-approved first before committing to sending out offers, looking to purchase a property that range anywhere between $70k- $250k. Hope this information is of use.

Thank you!

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John Warren
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
4y

@Faiz Kanash this is the conundrum that many folks run into when they are starting out in the investing world. Everyone wants you to have experience before they will do a deal with you. My advice would be to attend meetups and find a way to partner with someone with flipping experience so you can get that experience you need. 

Alternatively, you could look to use a traditional loan and then fund the rehab yourself on a smaller flip. I think a lot of folks discount the value of doing smaller projects as a way to ramp up into larger ones. Maybe flip a condo or a smaller house that just needs the cosmetics where your margins are smaller but there is less risk. 

I personally only did one flip. I flipped a home in Berwyn about five years ago, and I ended up making pretty much nothing after 14 months of work. This helped me pivot into the apartment space, and it was an incredibly valuable learning experience. 

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  • JJ Lunsford
    Lender · Member since 2022 · 61 posts · 12 votes
    4y

    Hey Faiz, I've got some good stuff for you! I'll shoot an connection/message over shortly.

    1Reply
  • Haven M.
    New to Real Estate · Newburyport, MA · Member since 2011 · 31 posts · 14 votes
    4y

    Hey Faiz, I'm a private lender and do lend in Illinois. I can tell you that my group very rarely lends to people with no experience. I don't want to dash your hopes completely because it has happened, but you'll have to build a really solid case that your deal is a good one, that you can manage the project, and that you have numerous exit strategies in in place in the event that plans A and B don't work.

    There's also not really such a thing as "Pre-Approval" in hard money lending because the deal is more contingent on the asset, and not so much the individual. I can't even begin to work through an application process until I can see the contract for the purchase of the property. Without the contract, there's really not much to go on.

    Feel free to PM and I can get in touch to maybe give you a better idea of the process and what you'll need to get in place to stand a chance.

    3Reply
  • Ryan Deasy
    Lender · Farmington, CT · Member since 2015 · 542 posts · 321 votes
    4y

    @Faiz Kanash when i first got started with basically no experience, i had a HML take me under his wing and really show me the ropes and spent time explaining the ins and outs. that was huge for me and i stuck with him for years, and actually still use him. hard money is a great strategy and really let me scale alot faster than normal conventional loans.

    1Reply
  • Mike Scaccia
    Member since 2022 · 33 posts · 31 votes
    4y

    @Faiz Kanash 

    I am a correspondent lender here in Chicago and just wrapped up a deal with an investor client. He just finished his Fix n Flip and listed two properties this month.

    I have access to some really great investors, who offer products directly related to your goals. If you have any questions or would like to set up a consultation please shoot me a message. I'd be happy to dig into your scenario and offer up any advice or resources that i have access to!

    Thanks, 

    1Reply
  • Paul De Luca
    Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes
    4y

    @Faiz Kanash

    Surely your friend could recommend some lenders to you? Otherwise you can click the network tab and go to Hard Money Lenders. I've heard good things about Renovo Financial.

    0Reply
  • Michael K.
    Investor · Chicago, IL · Member since 2018 · 352 posts · 176 votes
    4y
    Quote from @Paul De Luca:

    @Faiz Kanash

    Surely your friend could recommend some lenders to you? Otherwise you can click the network tab and go to Hard Money Lenders. I've heard good things about Renovo Financial.


     I spoke with a rep at Renovo recently. They are primarily looking for people who are experienced and active, with at least two deals (of the same type they are looking for financing in) in the past two years. The active aspect is more important if building new or flipping. 

    0Reply
  • Dan Kerch
    Lender · Phoenix, AZ · Member since 2020 · 34 posts · 12 votes
    4y

    hey @Faiz Kanash

    We work with newer investors like yourself. Where in Illinois are you looking to invest? Full transparency we do not lend in Chicago but other areas of Illinois. PM me and we can discuss in more detail. 

    1Reply
  • Rachel Imhof
    Investor · Chicago, IL · Member since 2015 · 138 posts · 54 votes
    4y

    @Faiz Kanash to be honest and you already heard it that it will be tough to get a HML without any experience. If your friend who has been doing it for sometime would do a Joint venture with you then he can go on the loan and put his experience in there for you. My husband and I do alot of flipping and new construction in Chicago and surrounding areas. Feel free to PM me and I can connect you with him as one of his business partners is a HML.

    Take care,

    Rachel

    1Reply
  • John Warren
    Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    4y

    @Faiz Kanash this is the conundrum that many folks run into when they are starting out in the investing world. Everyone wants you to have experience before they will do a deal with you. My advice would be to attend meetups and find a way to partner with someone with flipping experience so you can get that experience you need. 

    Alternatively, you could look to use a traditional loan and then fund the rehab yourself on a smaller flip. I think a lot of folks discount the value of doing smaller projects as a way to ramp up into larger ones. Maybe flip a condo or a smaller house that just needs the cosmetics where your margins are smaller but there is less risk. 

    I personally only did one flip. I flipped a home in Berwyn about five years ago, and I ended up making pretty much nothing after 14 months of work. This helped me pivot into the apartment space, and it was an incredibly valuable learning experience. 

    3Reply
  • Ken Vesely
    Lender · NJ · Member since 2018 · 22 posts · 8 votes
    4y

    @Faiz Kanash i am a direct lender and have no issue working with 1st time investors. Reach out lets talk! 

    1Reply
  • Joseph Crawford
    Lender · Philadelphia, PA · Member since 2019 · 19 posts · 6 votes
    4y

    @Faiz Kanash the 1st thing I would try is go to your bank and some local Credit Unions. Apply for a line of credit. ( works just like a credit card)

    Use it a few times, that you can pay off each mont to fully establish the line. Don't let it sit dormant. That way if you ever need it to close it is there.

    0Reply
  • Jonathan KlemmBusiness Member
    Moderator
    Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
    4y

    Hey @Faiz Kanash - I'm kind of in agreement with everyone above.....doesn't your friend have a hard money lender they could recommend?

    If not, I'd try connecting with Renovo, LimaOne, or Constructive those are a couple of the good Chicago lenders.  If you need specific contact info feel free to reach out and I can hook you up.

    [email protected]
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    0Reply
  • Mike Klarman
    Specialist · NJ · Member since 2022 · 1k+ posts · 653 votes
    4y

    Truth is, shopping for a hard lender is like shopping for a car.  You gotta go to the lot, talk the the salesman and feel him out.  Then go to another lot and see what another salesman's pitch can offer.  Are you hearing the same things?  Different things?  They are probably close in price.  Have to be, if not one would get all the business.

    Finding a lender is the same thing.  Call them and talk to a loan officer.  Ask a zillion questions.  Repeat that with 5 lenders and then you'll have a sense for how it all works and who offers what and what do they all offer that is the same.

    1Reply
  • Michael Kinsella
    Lender · Member since 2018 · 617 posts · 275 votes
    4y

    I was hoping someone would be able to recommend me a hard money lender in Illinois(I'm in chicago). I don't have experience, and currently looking to do a fix and flip on single family homes.

    You'll need to turn over more stones, i.e. speak with more lenders than someone with experience. Many lenders have experience requirements, but there are a few that don't for fix and flip products.

    I'm shadowing a friend of mine who's been doing this for years, he's going to be the one that is going to be guiding me through mostly everything on my first property investment so i'm not going in blind here.

    Good.

    I was hoping if anyone had any recommendations for a hard money lender that would work with someone with no experience? I have high credit(730+) and enough savings to cover rehab and downpayments.

    Local REIA meetings, local investor referrals, and the BiggerPockets Network --> Hard Money Lenders tab are good starting points.

    I'm also looking for a loan provider that preferably doesn't have any prepayment penalties. 

    Some HMLs offer no prepayment penalty. HMLs are generally looking to hit a certain yield. As such, sometimes they need to collect a minimum number of monthly interest payments, or what would effectively be a prepayment penalty.

    I don't have any property i'm committed to right now, wanted to ensure I could get pre-approved first before committing to sending out offers, looking to purchase a property that range anywhere between $70k- $250k. Hope this information is of use.

    Some, but not all lenders can provide a proof of funds based on your liquidity and don't necessarily need a specific property to provide one.

    Best,

    Michael

    1Reply
  • Faiz Kanash
    OP
    Member since 2022 · 36 posts · 26 votes
    4y
    Quote from @Paul De Luca:

    @Faiz Kanash

    Surely your friend could recommend some lenders to you? Otherwise you can click the network tab and go to Hard Money Lenders. I've heard good things about Renovo Financial.

    Quote from @Jonathan Klemm

    Hey @Faiz Kanash - I'm kind of in agreement with everyone above.....doesn't your friend have a hard money lender they could recommend?

    If not, I'd try connecting with Renovo, LimaOne, or Constructive those are a couple of the good Chicago lenders. If you need specific contact info feel free to reach out and I can hook you up.

    ---

    Unfortunately, my friend has never used a HML. He primarily does all his deals strictly cash. But thank you for the recommendations!

    1Reply
  • Faiz Kanash
    OP
    Member since 2022 · 36 posts · 26 votes
    4y

    I very much appreciate all the replies from those giving me more insight on what i'm to expect, as well as offering recommendations for lenders! I will be getting in touch with a lot of you who asked me to DM you personally to get a better idea of rates and such. 

    Thank you again for all the help everyone!

    0Reply
  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    4y

    I may have someone for you. Shoot me a DM

    0Reply
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