A HM Lender that sounds promising, Even for Newbies like Me!

[Steven Harris]

What's your take on Stratton Equities?

After coming from a meeting with a wholesale realty company and discussing HM loans, my Lyft driver (yea, I don't drive either) told me about Stratton. I've had a few conversations with them and they seem like a great lender for newbies like me. Rather than having to pay almost 50% on a property as I was told I'd have to by the other guys, Stratton would lend me up to 90% of the cost to buy. None of the three reps I spoke with said I'd have to come to the table with anything close to 50% regardless of my lack of RE investing experience. Again, this *sounds* promising. I'll follow up, for those who're following my journey :^)

FIX-N-FLIP LOANS
Starting at 7.25%

• Up to 90% of Property Purchase Amount

• 100% Financing on Rehab Costs, 75% ARV

• No Interest Charged on Unused Rehab Funds

• 12-18 Month Interest Only (No Pre-payment Penalty)

• Also Available: Multifamily Bridge Loans up to $5M

[Joe Splitrock]

Ask them what they charge for upfront fees. Sometimes they charge upfront for loan fees or origination. It appears these loans do go through a vetting process based on the borrower. It says on their website:

Fix & Flip Loans are usually sold on the secondary market and goes through a full underwriting with tighter guidelines. For instance, depending on the lender, Fix & Flip loans have a minimum FICO requirement. Additionally, the borrower can’t have late payments, foreclosure, judgments, or bankruptcy on their credit for 24-36 months. 

This could definitely go a good option as long as you calculate the fees and carrying costs into your numbers. Carrying costs can be a killer on profits. 

[Steven Harris]

@Joe Splitrock thanks for your input. I definitely read those stipulations you've pointed out. Thankfully my credit is excellent with no late payments or liens or other things ever. I even pay all my cc bills in full each month. I WISH my credit score were enough to completely qualify me for lending,,but of course there's more that's considered.

I copied this from the site:

NO UPFRONT FEES! NO JUNK FEES! NO TAX RETURNS!

I've been assigned a loan officer who confirms it to be valid.

Trust but verify, they say. I'm still verifying :-) 

[Joe Splitrock]

Originally posted by @Steven Harris:

@Joe Splitrock thanks for your input. I definitely read those stipulations you've pointed out. Thankfully my credit is excellent with no late payments or liens or other things ever. I even pay all my cc bills in full each month. I WISH my credit score were enough to completely qualify me for lending,,but of course there's more that's considered.

I copied this from the site:

NO UPFRONT FEES! NO JUNK FEES! NO TAX RETURNS!

I've been assigned a loan officer who confirms it to be valid.

Trust but verify, they say. I'm still verifying :-) 

 Be careful on that "no upfront fees" comment. Sometimes that means the fees are just added to the loan. Just ask to see a sample settlement statement outlining all loan costs, whether paid up front or added to loan. Thanks for sharing your experience here. 

[Steven Harris]

@Joe Splitrock, so far I'm told I'd be responsible for paying for the title search and appraisal. They'd source these services, I'd pay for them..These charges are usually included in the closing costs of a conventional loan, so again, this sounds legit thus far. 

I'm gonna send in a property that I want to move on. I can then look at the full and actual breakdown of all funds I'll be responsible for in order to use this lender.

Still verifying, cautiously optimistic though. 

***I feel very close to receiving at least one job offer. If I get it I might just do an FHA 203k loan on a quad or tri that I can be an owner occupant paying only 3% down***

But let's just see. I'll follow up.

[Judson Hoffman]

Hey Steven, I'm shopping around for fix & flip lenders.  How did this turn out with Stratton Equities?  Thanks!

[Mike Jimenez]

Quote from @Steven Harris:

@Joe Splitrock, so far I'm told I'd be responsible for paying for the title search and appraisal. They'd source these services, I'd pay for them..These charges are usually included in the closing costs of a conventional loan, so again, this sounds legit thus far. 

I'm gonna send in a property that I want to move on. I can then look at the full and actual breakdown of all funds I'll be responsible for in order to use this lender.

Still verifying, cautiously optimistic though. 

***I feel very close to receiving at least one job offer. If I get it I might just do an FHA 203k loan on a quad or tri that I can be an owner occupant paying only 3% down***

But let's just see. I'll follow up.

 Hello Steven, I was searching for information on Stratton No Doc loans and was following up with you and seeing how your experience was with Stratton? Thanks for sharing.

[Jay Hinrichs]

Quote from @Mike Jimenez:

Quote from @Steven Harris:

@Joe Splitrock, so far I'm told I'd be responsible for paying for the title search and appraisal. They'd source these services, I'd pay for them..These charges are usually included in the closing costs of a conventional loan, so again, this sounds legit thus far. 

I'm gonna send in a property that I want to move on. I can then look at the full and actual breakdown of all funds I'll be responsible for in order to use this lender.

Still verifying, cautiously optimistic though. 

***I feel very close to receiving at least one job offer. If I get it I might just do an FHA 203k loan on a quad or tri that I can be an owner occupant paying only 3% down***

But let's just see. I'll follow up.

 Hello Steven, I was searching for information on Stratton No Doc loans and was following up with you and seeing how your experience was with Stratton? Thanks for sharing.

I cant help but think of the Wolf of wall st.. and stratton Oakmont LOL.. great movie.

[Salvatore Lentini]

@Steven Harris - Make sure your numbers are accurate.  Do you have a good handle on how much rehab will cost?  Do you have really dialed in comps?  Does the HM lender have a minimum number of months for the loan?  If you finish in 3 do you still have to pay for 6?  Any fees at the end of the loan?  HM loans are great for the purpose they serve.  Even investors that have money use them because it allows you to do more than one deal at a time.  But it is very very expensive money and you want to hold them for the shortest amount of time possible as they can make your profits evaporate.

[Jon Kelly]

@Steven Harris You can always come directly to a hard money lender that actually funds their own deals. Lower fees and a quicker process. Send me a dm. 

My company offers up to 90% of purchase and 100% of rehab for fix-and-flip loans. 

@Salvatore Lentini has a great point. The rates on fix-and-flip loans are higher than terms loan. Rates can be 8-9%+. You'd want to pay these offer ASAP and sell or refinance into a longer-term loan. Our fix-and-flip loans are 12 months with 2 additional 6-month extensions (24 months max) and you can pay off any time without penalties. 

[Salvatore Lentini]

@Jon Kelly Rates of 8-9% for hard money is going to be hard to find with rates heading up.  Long term rental financing is 5.25 - 6.5% on a good day now!  I haven't done hard money in a while but 8-9% sounds like numbers from a couple months ago.  What company are you with?

[Jon Kelly]

@Salvatore Lentini Roc Capital. Our floor on fix-and-flips is still 8%. That's why it's best to come as close to the money as possible. Cheaper rates and faster process. 

We're all in the same boat with rates going up... hopefully these next rate hikes are already priced in 

[Salvatore Lentini]

@Jon Kelly - good for you guys.  What kind of rates do you have on rental loans?  Term?  I work with a lot of investors (myself included) currently looking for financing.

[Jon Kelly]

@Salvatore Lentini 1-4 units and portfolio loans low to mid 6s. Multi-family 5-8 units low to mid 7s. 

Reach out when you are close to your next opportunity. 

I have close friends that just moved to Doylestown :)