Anyone used Bridgewell Capital for hard money loan on a flip?

Question

Looking into best hard money lender for 90 day flip. Im in Orlando, Fl. Considering Bridgewell Capital. Also considering a regular conventional as an option. Thoughts? Could use all the help possible. Thanks

Ryan Blake · Answer

@Gina Brunello I don't know a lot about Bridgewell specific but I can shed light on how normal hard money works, which is not at all like @Harry Copeland experience. Normal hard money will do a credit check and ask to see a few months bank statements to see what your cash on hand is. They will require anywhere from 15% to 0% "skin in the game" which is another way of saying down payment on the purchase. Just about every hard money lender will cover 100% of the repairs cost using a draw system. When the work is completed, they send someone to verify and then cut a check/wire the money to you.

What I think happened in Harry's situation is that they offered a lower rate and term and maybe even a lower "skin in the game" requirement but in returned they wanted to have more documentation. Hard money without all the extra docs is anywhere from 11% to 14% annual interest and 2 - 4 points (% of the total loan paid up front). This will be reduced if you provide more information but either way, they should be able to close within 10 business days or less instead of a conventional loan that takes at minimum 4 weeks.

Hope this helps shed some light on HMLs in general. If you have any more questions, please tag me in them below.

Ryan Blake · Answer

This is an example that I would give:

ARV = $370k

Max Loan Amt = $259k (70% LTV of the ARV)

Purchase = $190k Loan / $20k Down (90/10)

Reno Financed = $50k (most HMLs will want you to finance 100% of the reno costs)

Points (3 is the most common I see) = $7,200

Fees = $800

Total to Close on Loan = $8k

Monthly Interest Only Pmt (13% annual) = $2,600

3 Month Total = $7,800

Total Financing Costs = $15,800

That is how most hard money will work. They won't use an ARV for the loan unless you are going to finance the repairs because that is their only guarantee that you are actually going to fix it up.

You can get better rates like Harry was talking about but then you would need to show all the documents. It should still close quick though. The only way to close quick on most loans (commercial included) is by having an open line of credit with no restrictions like a HELOC.

Pennie Heath · Answer

Haven’t used hard money yet but did use a conventional loan. We used a Heloc on our primary residence for the money to renovate.  When we sold we paid our Heloc back down to zero and the loan off of course. Now using the Heloc again to renovate 2nd flip but we did so well on the first that a family member asked to invest and we didn’t have to get conventional loan.  Good luck.

Harry Copeland · Answer

i was recommended by one of those real estate gurus to use bridgewell on a flip. the paperwork was much like a conventional loan and not based on the value of the DEAL as the guru said......2 years income tax reports, credit checks, bank statements, statement of cash in the bank, skin in the game i think they called it, and it went on from there...i finally gave up

and went back to flipping hamburgers

Gina Brunello · Answer

@Ryan Blake

Thank you for taking the time out for the great info and advice. It greatly appreciated!

Ryan Blake · Answer

@Gina Brunello

Yes. Some conventional will require one point but nothing like the 3 - 4 points you will pay with hard money. It really is only if you need cash fast for a quick close or if you wouldn't qualify for a conventional loan or if you want to close the property in an LLC (90% of conventional loans can't be in an LLC's name).

There is a time and place for them but really you should exhaust other options first.

Gina Brunello · Answer

@Pennie Heath

With the conventional loan- did you have to wait the 4 months to close? Any issues with the loan seeing that it was a flip, while being approved for it? How was the loan structured? Thanks!

Gina Brunello · Answer

@Ryan Blake

Thanks so much for this breakdown.

So other than the required docs, 20% down instead of 10% and a slightly longer loan approval- conventional seems to be the way to go to avoid the points and fee.

Really with conventionl- im looking at a 20% downpayment with very low interest monthly compared to hard money, and thats really it. Other than normal closing costs.

Gina Brunello · Answer

@Ryan Blake

Thanks for all that info, super helpful. Id really like to know a good idea of before closing costs. So let me give you my example:

Purchase Price flip for $210000

After reno sell at $370000 (Im an agent- comps FULLY support)

10% down

$50k Reno (Probably wont need loan for this)

Excellent credit and income

3 month max flip

Give me hypotheticals on when Ill be paying what.

Sounds naive but id like to pretend to not know anything at all so I am fully educated and knowledgable before pulling trigger.

Gina Brunello · Answer

Thanks for that info. How long was the loan approval process/funding? Id like to close on it asap. Also- what was required for the loan from you? @RafieAhmed

Anyone used Bridgewell Capital for hard money loan on a flip?

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