?Rehab Borrower Survey

[Account Closed]

Rehab borrowers,

As a rehab lender I'd like to determine how best to structure short term loans, so if you can help me by answering a few questions I'd appreciate it:

1) Do you prefer monthly payments, or to pay everything at the end? Are you willing to pay higher interest/fees for your preference?

2) Would you prefer to pay zero interest and zero fees during the life of the loan and give up 50% of the profits at loan payoff, or pay the going rate for rehab money and keep 100% of the profits?

3) Is quick funding important to you? Are you willing to pay higher interest/fees for this?

4) Are you willing to pay more for a higher LTV loan, or are you good with a low LTV loan that has lower interest/fees?

5) Which do you think will make you more money in the end, splitting profits with a money partner or borrowing money at the going rates?

6) Would you prefer to get a loan through a licensed broker or an unlicensed individual? Would you be willing to pay more for a brokered loan?

7) Is it possible for a loan that is 100% of the purchase price to be more dollars than a 65% of ARV loan?

8) Please feel free to comment on anything I should have asked but didn't.

Thanks!!

[Dell Schlabach]

1. I prefer to pay interest and principal at the end of loan, creates less paperwork for me, I have most of my rehab loans structured this way, my average loan is paid off in just under five month.. I may be willing to pay a couple hundred more of this but not an extra %.

2. Depends on the going rate for rehab money. A few years ago the going rate for my rehab money was 32-37%, and I was just coming out of a personal crash. At that point I was doing 50/50 splits with lenders. Today my going rate from my private lenders ranges 8-12%. Not interested in 50/50 splits.

3. Quick funding and knowing the money is available is critically important to me, that's why half on my money is at 12% I could get it for less but the ease of borrowing and never having to wonder if we are going to have glitches is worth a few % points to me.

4. I get all my deals funded 100% of purchase and rehab.

5. Borrowing money at going rate for me, for a while I had a "partner" that was funding me at 35% of profits, I dropped that at the end of last year.

6. I am most interested in borrowing from the person or company that is the easiest to work with, I would not pay more for a brokered loan.

7. If it was that would seem like very bad deal for the rehabber, if there is any significant rehab involved. Its possible if you find a sweet deal where rehab is 5-10% of selling price.