All Forum Posts by: Amanda Williams

Hello Fellow Investors,

Just wanted to put a word of caution out there about Finance of America Commercial. I recently was approved for a LOC of 2.5 million BUT quickly discovered they are selling a bag of goods that they don't deliver. The LOC was easily approved within 2 weeks -- albeit a lot of documentation was needed. I then proceeded with a new construction loan and was told that my closing date was easily doable. I sit here 6 WEEKS after they have received my application and they have not closed. There was NO communication at all after the LOC was issued. They just blew right past the original closing date with ZERO communication, I then voiced concerns, and was told I would get answers which never happened -- I then reached out to management and finally started to get some communication. Then there was the appraisal. I was contact by 3 different appraisers who had no idea what they were appraising -- which was a vacant lot and a yet to built new construction home. When the appraisal finally came in it was SIGNIFICANTLY lower than expected (and I have sold many of these homes already this year, so I have the value pretty dialed in). They used comps from 8 months ago!!! Additionally, get ready for the fees! They will sell you on the "lower rates & points" , but the fees make them as or more expensive than other HML's. Finally, I just canceled the loan and am not even interested in trying to utilize the LOC. They are not a good fit for any investor trying to scale their business -- you will lose deals as they drag their feet. If you are a new investor STAY AWAY! Luckily, I have other HML's that I use for construction financing and am already off to the races with them. The only reason I spent any time with FOAC was b/c of my business scaling this year and trying to increase the number of lenders I work with. Hopefully, this will save some of you from the headache!!

Thanks so much for chiming in. This was our original plan, but the lender will want both LLC's who hold title to personally guarantee the construction loan, so that is where we are running into issues. I was thinking a JV agreement may help us get around this?

Hello! I am trying to figure out the best way to structure a partnership opportunity for one of my upcoming land development projects. I will be purchasing land, subdividing, and building 5 homes. I have a partner/investor who wants to fund the land purchase and development expenses via a self-directed IRA while I will be taking care of everything else including the construction loans. Initially, we were going to form an LLC, however this will present issues with construction loans. The lenders won't lend to an LLC with a custodian as a member and the investor does not want to be a personal guarantee on the construction loans. I was thinking that a Joint Venture may be the way to go? Does anyone have any experience or advice on this? Thanks in advance!

Thanks for the replies. I don't have a GC on the job bc I have handled these types of projects on my own in the past. Although the $$amount is high, it is a pretty straightforward reno. My business has grown a lot this year and I needed to reduce my time on this project bc of other opportunities. This guy was laid off due to the pandemic, i knew him personally, and seemed like he had a background that could work. I still think we will have a good outcome,  just need to make sure i am setting us up for success. 

Hello All,

I recently hired someone to help with managing a 60K renovation I have going on with a BRRR property. He has experience managing new builds and does some of his own handyman work. Great guy, but is not quite managing the schedule and flow of contractors as efficiently as I would like. My initial plan was to pay him 10% of labor cost that he arranges/manages and hourly for any work that he does himself. Last week he sent me an invoice for 3 hours to go pick up some materials that the contractor on the job should have handled. I don't think he is trying to "milk" me, I just think he is trying to figure this out. He has a lot of potential and I have a lot of deals going on and would rather not be on this job multiple times per week. I feel like I need to provide some more direction to him and more clearly define his compensation structure. I would love any thoughts, experience, or ideas on how to approach this with him and how to compensate him for a successful outcome for us both! Thanks!

Hi Jon! Good to hear from another Asheville investor. When  you say you have the same situation - do you mean you charge a flat fee or that you truly include the water in your rental amount? 

 Jack - I am looking do something similar with a triplex I have in the Asheville area - just wondering how this worked out for you?  - Amanda

Need some suggestions on how to craft this deal. It is a 2.15 acre tract with 2 existing SFRs on it. I am planning to subdivide the property into 3 lots. BRRR one SFR, demo the other one and build houses on the 2 new lots. I am asking for owner financing, but want to be able to own the 2 new lots free and clear so that I can use them as collateral on the construction loan. How should I suggest the structure of the owner financing to make the seller comfortable? My first thought was to tie the financing to the home I am BRRRing, but then if I were to default, essentially, I would get to keep the vacant lots.....so not a good idea for the seller. Any thoughts out there???

These are never fun situations to deal with! I have dealt with 2 situations where the seller did not disclose something fairly major and was able to get them to both pay for it retroactively. The key is having evidence that they knowingly did not disclose it and having access to a good litigation attorney if needed. The best way to gather evidence is to try to find out and speak with the builder and plumbing company they worked with. If you can track them down, then they can tell you if they knew about the issue and whether or not it was discussed with the previous owner. In one case, i was even able to get the plumbers previous quote to fix an issue that had the sellers signature on it. No way they could deny that. The seller ended up paying for the fix and reimbursing me for all emergency repairs and water damage to the unit. Once you can prove that they knew about the problem and intentionally didn't disclose it, I would consult with a litigation attorney. They can give you the language to use and can be available to draft a letter demanding payment if you aren't able to resolve the situation yourself. In both of my situations, once I had the undeniable evidence and stated that I was willing to file a suit against them for damages -- which would result in 2-3x's the dollar amount of the actual fix -- I didn't have much issue getting reimbursed. Please feel free to reach out to me directly if i can help in any way! 

Good morning. Any advice out there on what to do with this? I have a duplex that I recently closed on that looked like a great deal before the coronavirus. I was able to get the duplex (value 190K) along with a separate pin building lot for 195K. The plan was to refinance the duplex and own the lot free and clear for a new build. Well, now rates are higher and its becoming harder to find lenders to refinance with. Any words of wisdom on this or recommendations on lenders to talk to? Should I just wait, my HML is for 9 months? Thanks!