Seeking recommendations on hard money lenders in Austin

[Stephen Stokes]

Good experiences and bad please share feedback on hard money lenders you have used to acquire multi-fam rehab properties in Austin area. Specifically, I am looking to purchase a duplex with minor repairs/upgrades needed, rehab and then refi to conventional loan. What type of rates have you seen? What should one look out for? What does the structure of a "good" loan look like? This will be my first experience this type of transaction so I prefer to learn from others' experiences instead of making my own mistakes. 

[Alex G.]

I haven't had to use HML in 3 or 4 years. I usually finance my deals with private individuals to avoid extra costs often associated with HMLs. However, if I ever need HM loan AJ Shields mentioned by @Shawn C. would be the first guy I'd go to. 

The typical terms for a HM loan in Austin metro are:

Max Total Loan to ARV <75%
Loan to purchase <=90%
Rehab amount financed (90-100%)
Term: 6-12 months
Rate: 12-14% APR
Origination points: 2-3%
Appraisal fee: $500-600 required by most
Survey: required by most
Doc Prep Fee: $500-800
Underwriting fee: $500-1600 (on a high end usually include doc prep fee)

The rest are  title company closing costs that you'd expect to pay:
- Filing fee (~50),
- Escrow fee ($250-400),
- Tax certificates (~$50),
- Title insurance premium (varies based on the financed amount, see http://independencetitle.com/dfw/title-insurance-p...

Some private folks at various local REI Meetups and Clubs also offer "gap funding", i.e. the down payment equity financing and/or rehab financing where it exceeds what HMLs would finance within their Max Loan to ARV %.

In general you want to request from a prospective lender an itemized list of all costs, not just rate, term, points to avoid surprises at closing. 

You also need to ask if there is a pre-payment penalty and after how many months it drops.

Last but not least they all want to see some experience, verifiable track record, etc. So put together a little package selling yourself as a good investment borrower. Include whatever you got going for you: good credit score, real estate courses you took, outline experience with buying investment properties, references from title co and private or HM lenders. 

If you have some rehab deals under your belt, create a webpage (or Google Drive page) for each one and upload "before and after" pics to showcase your skills with transforming properties from junk to candy. 

Good luck!