Lima One Capital reviews updated

[Bradley Bladon]

I recently went to a local REIA here in SC and Lima One was the guest presenter. Apparently they've experienced a lot of growth and tout themselves as the largest volume (or one of the) largest Hard Money lenders in the country. Most all of the reviews I read here on BP seem to convey bad experiences, although most of them are 2-3 years old.

Anybody used their Fix & Flip program in last 12 months and have a good experience? I’m mainly interested in them bc they are headquartered locally for me and I like that local accountability if I need it...

Thanks!

[Colton Kyle]

I am not affiliated with Lima One Capital.

Since September 2018, I have used Lima One Capital for one Fix/Flip deal, as well as two separate duplex BRRR deals. All three loans are currently still in the 13 months interest only period, and have not been refinanced. They qualified my terms based on my previous 24 months experience. They have several tiers that include different origination fees and interest rates. The more deals you have completed, the better rates/terms you receive. The deal was underwritten based on an appraisal that they ordered (Subject to appraisal including sales approach, income approach, and cost approach), my liquid assets meeting their reserve requirement based on 10% loan size and six months interest only payments (60 days of statements and screen shot of current balances of personal and business assets), and a construction budget that I prepared and submitted (no contractor bids/estimates needed). They do require a minimum credit score, but do not ask for proof of income, as they underwrite strictly on asset performance (Very Helpful, as I did not have W2 income and had not completed first year tax return for my new business).

Over all, I have to say the process was very transparent and simple. The only issues I had was with the appraisers and draw inspectors either being confused about what they were hired to do and/or their turn around time. When ordering a draw, you simple go to your online portal, click construction tab, then submit a dollar amount for each budget item. They charge $200 per draw (this is higher than other lenders), and have your funds issued within 24 hrs of draw inspection report being submitted (this is where the inspectors can hold up the process). 

On all the deals, I was able to secure 90% purchase and 100% reno. Since I was in the lower tiers at the time, I paid 2-3% in points, 10-12% interest only for 13 months, and had to pay interest on the undrawn portion of the loan. In the lower tiers, you will also have full recourse on the loan. I have the Flip deal listed to sell, and with the two duplexes I am waiting for 6-month seasoning. They will refinance the duplexes now, with a single portfolio loan (saving on multiple origination fees), but at 6 months they offer a lower rate and 80% vs 75% LTV (allowing me to free up all initial capital for future deals). They will also use the original appraisal to determine DSCR, if the units aren't rented yet.

Once you move to long term financing, they offer 30 yr amortization (this is critical for my rental strategy) with 5/1 ARM, 10/1 ARM or 30 yr fixed rate options (6-8% rates)

TLDR; As a new investor/entrepreneur, the process was as easy as I have seen with any other lending institution. They offered competitive rates and terms to meet my investment strategy. I did have issues with the appraisers and draw inspectors they hired (I assume due to them not being from the area and just picking someone from a list). If you do not have a track record of successful deals, be prepared to pay to play. Overall, I would recommend them to other investors.