LOOKING FOR FUNDING ON NJ & CT DEALS

[Asher Carr]

Hi everyone,

I just joined BP and excited to get things going for my business. I've been operating for a few months now and getting better at making offers. However, I am in need of financing my deals and I am alone in this journey. I already have buyers waiting for me to fulfill their dream home but I don't know how to go about closing the deal without money. I operate in NJ and CT and soon PA. I would like to work with a private lender or lender in general that can help me, and educate me on how to get financing and do a deal right. Thanks in advance.

[Scott Hollister]

Hello @Asher Carr,

Welcome to BP!

Glad to see you are taking action by making offers. But make sure you have the capital to close those deals when you get one accepted, otherwise the agents will remember that you cannot close and will think twice about accepting your offer next time. It is a small industry and your reputation plays a large part in your success. 

It terms of working with private lenders/lenders:

• They typically like to see skin in the game (putting down 5-25% of the purchase price)
• Experience: lenders like to see 2-5 deals in the last 12 months
• Credit score not really a big factor, but still considered 
• Exit strategy: They want to know what your plan is for the property 

My advice is to understand these numbers:

• As-is Value 
• Repair budget
• After repair value

There is no magic and the more you become an expert in your area, the easier it becomes to spotting a good deal and understanding the numbers above. Typically you have to build a track record first, then private money becomes "easier". Not always the case, but at first I used hard money. They lend 85% of the purchase price, 100% of the rehab, NOT exceeding 75% of the ARV.

And with private money, you can create any deal structure. My last one was financed 100% of all costs, purchase price, rehab, holding costs, etc. So I didn't pay any money during the project and the lender received the payout at closing. I offered them 10% fixed, whether we closed the deal in 6 months or 12 months. 

The best way to educate yourself is going to meetings, talking to other successful investors, and reading. Check out Anson Youngs Book, I just finished reading it yesterday. I think it would be a great guide to help fund your deals. 

Best of success! 

-Scott