Hard money lender wants me to designate a “project manager” separate from my GC/agent

[Sean Haran]

Hello all! I am based out of Los Angeles and I'm working on a long distance BRRRR deal in the hilltop area of Columbus, OH. I am planning to use Longhorn Investments hard money loan to fund the project. They're asking that I designate a project manager who would be able to visit the site regularly, but is not the GC. I basically have no idea who to use and am looking for suggestions/anyone who has worked with them before (or another lender with a similar requirement). I really like the fact that Longhorn will fund up to 100% of purchase and rehab costs (up to 75% ARV), that's why I was going with them in the first place. I have spoken to some other hard money lenders and most require 10-20% of the purchase price as a down payment. I have the cash but obviously if I don't have to put it down I'd rather not. At a crossroads now as to whether I should try to find someone who I can at least list as project manager (I have no clue if they actually would be contacting this person regularly or require really anything from them) or if I should just use a lender with less stringent requirements but that will require at least 10% of purchase as a down payment. Any advice/stories about a similar situation would be much appreciated!

[Andrew Postell]

@Sean Haran I have used Longhorn many times.  Love working with them.  Would certainly understand this position though.  

There is always this question that is debated of "What's the best market to invest in if you are investing out of state?"  

Usually the answer is in the form of another question - "Where do you know someone that will protect your investment?"

As a 15 year, out-of-state investor my recommendation is to ALWAYS choose whatever city you have the most trustworthy contacts in. Keep in mind that you may never see your asset. That's an ENOURMOUS amount of trust/money to put into a stranger's hands. What I mean here is that if you know someone in a "City X"...but that city may not have as good as numbers as "City Y"...then stick with "City X"...the city where you know people. One wrong move, one wrong contractor, one wrong vendor…will erase any "benefit" one city has over another. Your network is the most important piece for any potential returns when you invest out of state.

And please don't hear what I'm NOT saying - I'm not saying don't invest in Columbus.  What I am saying is that you should absolutely, 100% get someone that you trust to manage your property for you.  Even if another lender won't require it...I would highly recommend to have someone that is local to help with this.  Even AFTER your property is completed. 

Hope this makes sense how I am describing this.