Private Money Lenders that can beat 2 points & 12%

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Private Money Lenders that can beat 2 points & 12%

Brooks Mosier
Investor · Lees Summit, MO · Member since 2014 · 25 posts · 2 votes

Our company is expanding quickly and we're looking for more private money lenders to fund our short term (3 to 6 month) flips. We own around $1MM in real estate with the current flips we have going on right now, and that number is growing... We do retail flips and turnkey properties based in the Kansas City Market. 

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Aaron Crouter
Lender · Jersey City, NJ · Member since 2016 · 8 posts · 1 vote
10y

You have a few options. You can refinance part of your portfolio to pull out equity to fund your flips...12% sounds like a horrible interest rate for an experienced investor. Most of the lenders I work with would fund an experienced flipper at closer to 8%. 

Let me know if I can help

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  • Aaron Crouter
    Lender · Jersey City, NJ · Member since 2016 · 8 posts · 1 vote
    10y

    You have a few options. You can refinance part of your portfolio to pull out equity to fund your flips...12% sounds like a horrible interest rate for an experienced investor. Most of the lenders I work with would fund an experienced flipper at closer to 8%. 

    Let me know if I can help

    1Reply
  • Brooks Mosier
    OP
    Investor · Lees Summit, MO · Member since 2014 · 25 posts · 2 votes
    10y

    @Aaron Crouter we are not holding the assets, so there is no portfolio to pull out equity as they are all being flipped in a relatively short amount of time. 

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  • Aaron Crouter
    Lender · Jersey City, NJ · Member since 2016 · 8 posts · 1 vote
    10y

    Ok. Are you looking for low interest Hard Money?

    0Reply
  • Brooks Mosier
    OP
    Investor · Lees Summit, MO · Member since 2014 · 25 posts · 2 votes
    10y

    Yes. Short term loans that we can use to flip properties for 3 to 6 month holds during renovation. 

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    try lendinghome.com  not sure if they lend there.. also Lendingone   Lima  Cogo

    these are legit direct lenders..

    I can get 1 and 8 at lendinghome but that's based on my experience level which allows me to qualify for their lowest loan rate.. so that's not bad..  my banks are at 1 and 5.5 to 6... difference is those are true construction loans so I only pay on drawn funds not on the commitment..

    but its tough when your cyclying deals so quick lender cant really make any money.. even though you think the rate is high.. look at total dollars to the lender  its not much for the risk..

    plus you should be making a big hit so why get worried about a point on a 100k deal that's a measly 1k .. would you not pay 5 points if you could get unlimited money?  what would unlimited money do for you? 

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  • Oren K.
    Rental Property Investor · Toronto, Ontario · Member since 2012 · 538 posts · 298 votes
    10y

    Sounds like what you really need is a substantial LOC.

    If you have built up some net worth and have the track record to prove success in flipping, it will be a less expensive option not only in terms of interest rates, but over all costs as the upfront costs are amortized over many properties and removes some / much / all of the overhead in constantly looking for new equity.

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  • Brooks Mosier
    OP
    Investor · Lees Summit, MO · Member since 2014 · 25 posts · 2 votes
    10y

    @Jay Hinrichs I will check those websites out. Thanks for sending. Yes, I agree with you on the fact that there isn't too much money to be made on the lenders side. 

    I wouldn't go as far as to say that I'm "worried" about paying $1K on a $100K deal. I am more so looking for more lenders with good rates since we are expanding and may need more capital in the future for our deals and other investments we're looking at doing. 

    I don't know if unlimited money would make too much of a difference if we were paying 5 points... The reason, is because we'd being doing less deals since the 5 point origination would take away from the front end purchase price when offering the seller. This would ultimately lead to less offers getting accepted to achieve our minimum threshold of profit per deal. 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Brooks Mosier  I always wonder about how you guys think this through... its usually counter intuitive.. and really depends on your deal flow..

    for those that struggle with deal flow cost of capital becomes something they can beat the bush's for since they are not doing much anyway.

    High volume flippers or TK outfits usually don't have deal flow issues... and make it up on volume.

    there is a fine line there as to how to approach it.... most of the TK outfits I fund are more worried about unfettered access to capital with cost secondary... one reason the price points are so low compared to say flippers here in Oregon were my average deal is 400k plus.... then the cost of money really factors in.. but when your sub 100k its not really that big of deal.. when you have 20 to 25% gross margins like most I see.

    Any way good luck with it... perfect time to have that Rich aunt or Uncle or grandfather or parent  that's the best money

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  • Brooks Mosier
    OP
    Investor · Lees Summit, MO · Member since 2014 · 25 posts · 2 votes
    10y

    @Jay Hinrichs I agree with you that most TK operations aren't as concerned as much about the cost of capital since it is more of a volume play with constant deal-flow. Our company isn't necessarily modeled like that currently, as we usually have about 7 to 12 flips going at once  which encompass both retail and turnkey flips. 

    That is why I posted this, since we are not necessarily a large TK volume flipper. Who knows? Maybe we'll morph into something different as some point... Right now we are focused more on quality over quantity and also flip properties in the retail world quite often. Business has gone great with the private lenders we have currently, and to your point, there hasn't been much red tape at all like you see with some hard money lenders. These great relationships that we have with our current private lenders, are the individuals that I was more so targeting in this post to see if there is anyone out there who would like to join in on what we have going on. 

    I appreciate your input, and good luck to you as well!

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  • Simmy AhluwaliaPro Member
    Lender · Atlanta, GA · Member since 2015 · 1k+ posts · 200 votes
    10y

    Points are the cost of doing business. I can offer an LOC from $500k to $4M. Yes, each deal is at 12/5.5, but once approved for the line, you submit the deal, a desktop UW is performed and the money is wired into your account within 5-7 days. Imagine how many deals that you can close with a 10-12 day close commitment on the purchase contract? This LOC allows you to scale, and scale quickly. This includes new construction as well. Will fund 90% of purchase and 100% of rehab.

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  • Ben Krieger
    Chicago, IL · Member since 2016 · 67 posts · 4 votes
    9y

    @Brooks Mosier Try propertygo.com. We had an Overland Park deal about 7 weeks ago. 

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  • Joe Assad
    Lender · Los Angeles, CA · Member since 2016 · 51 posts · 21 votes
    9y

    Hi Brooks,

    AssetAvenue is offering a 10% interest rate on rehab and bridge investor loans over $300K.  You can get an instant online quote at AssetAvenue.com or you can call us directly at 855-280-4248.

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