All Forum Posts by: Anthony Testino

Combing through the lender’s listed on Bigger Pockets. How do you decide who is best? Who have you all used and how did the deal pan out?

Obviously we all want the best terms but sometimes  terms aren't all we look for. In this COVID driven market finding a company who has a smooth process has a silver lining. 

I really think some lenders put a bunch of terms in a box, shake it up and pull out a hand-full of terms and read them off to you. So today I spoke with a few lenders which if you dont shop around your in the wrong business. One of the companies who I should add came highly praised by BP. I figured they must be great.

The deal I have in place is a lot which has to be subdivided but thats no problem. The lot can fit 8 houses no problem. The houses would be 3 story 2700 sq ft each, cost 170k to build, ARV at 500K easy. The lot cost was 400, beat them down to 340K. If you do the math this deal works all day long.

The lender turns around and tells me he wants 15% up front on closing costs, another 20% of the entire project cost in escrow, 15% of the construction budget in my bank account, at least 25% of the total project should be in my bank account as well to “ get rolling” in his words, in addition he wants me to have 12 months of payments on reserve as well as 50K incase things go south. What? So, you want me yo have almost the entire project cost in my bank account, why on earth would I even use you?

Next lender: Terms

7% at closing

2.25 points

12 month loan

Fund upon foundation completion

Minimum 6 jobs completed

Ok not too bad if you ask me. Two companies, same project totally different terms. This company doesn’t even come highly rated yet has better reviews and makes way more deals in PA. Insane, complete madness I tell you.

@James Kirby After 18 years of being in the construction field, Id say 90% of the owners an or workers have some type of criminal back ground. This isn’t saying that contractors are criminals, just that some may had made bad choices in their youth and this is one of the only fields whom allow others a chance and a change. Everyone deserves a chance and judging one by their mistakes from 15-30 years prior is just as bad as one judging others by their post.

Haven’t posted in a while. Honestly I lost faith in Bigger-pockets. I would try and start discussions asking about loan strategies or talking about bitcoin being the future and had literally the Founders of this app telling me stop crying or am I insane (in my own words). Well people I have found a bank who finances 100% of my projects including land with only 3% interest and bitcoin seems to be real estates best friend. Im pretty sure I was mocked and assured bitcoin would never play a part in real estate right in my own threads. Building over 40 houses right now, thanks for nothing, you know who you are!

@Laura Williams

@Laura Williams As a contractor and flipper Id have to say it really depends on location, heating/air element (electric/gas/radiator) etc. Also is there a bad draft coming in or space drawing warm air out or is this just cosmetic? I feel that replacing windows unless theres a bad draft or crack will not reduce the cost that dramatically. An average vinyl double hung window in Philadelphia costs an Av $136. To remove a window and install this new window costs around $550. Thats includes any new framing, trim work, drywall, paint and caulk. In Philadelphia the summers are 95+ degrees and the winters 30- degrees. An average gas bill is $230 a month to heat a 1200 sq ft house with say 9 windows. Say these windows are bad and need to be replaced. We are looking at $6400 when all is said and done because maybe 1 window was larger then expected. Now the draft is gone, the heat flow is stronger thus lowering the need of the heater running constantly and changing the bill from $285 to $186, saving $99. So now we have 99$ a month savings over a 5 month period. Not taking what you save on running the cold air into consideration you will save $495 over those 5 months and it will take 12 years to make you $6400 back through the savings you are now earning. Obviously you can just add to the rent or understand its an investment but thats the basic math.

A few months ago like always I went on search for a few lenders “private” or “personal” if you may. Because everyone knows so much about the “hot spots” where to build and where not to build, I had no luck. Many lenders told me “its not a great area, the numbers dont add up” when indeed the comps spoke other wise. Other investors wanted a 740 credit score with me using my own money to kick start the project as well as 3 years bank statements, 9% back, 4 points, 100K in the bank and so on and so on. One guy even told me, “this house makes no sense and it will never sell”. It so happens I wound up using my own money once again which if you read my other posts I dont believe anyone should use their own money. Either way, I funded the project the house was 119K and my rehab cost was 98K. I added a 3rd story and listed the house for 380K. The house sooe in under week, which all houses I this area have ben doing for months. The irony of it all was that the private lender by chance was lending to a biddy of mine for a lot up the same street and seen the comps on my property. He than decided to send me an email stating how unhappy he was that I didnt use him for my loan and that I should have pleaded my case, which I feel I did when I sent comps and asked for a loan. He than emailed me again this time acting as he felt he was entitled to profits for me not disclosing how profitable this house was, which I did. Are there lenders out there who actually research projects or do they all just pop them in the MLS and see what comes back?

@Matt Snow Wow, someone after all this time finally answered my question in full detail with not only legitimate responses but intelligent ones which are cited sources. Im shocked how many people who “invest” in crypto and “flip” so many properties dont have this knowledge. I need to sit back with a few colleagues and just put this response on the big screen and read it out-loud because in 10 years everyone take notes, this guy “Matt” is going places beyond where he is now. I have so much to say but right now im just going to read this a few more times. 

A shell

J Scott Not sure how you picked up evading taxes out of that but not my thoughts at all. I was more on the lines of trading bitcoin for properties and funding rehabs with bitcoin and or bitcoin or crypto currency replacing cash all together. I also dont think one who invests in crypto should refer to it as a “tax evading tool” it may paint an unwanted picture or give others ideas there are some insane people out there. I purchased bitcoin 8 years ago with a few friends when others thought it was a joke, I knew what its worth was and would be. I also purchased 12K in google stocks at $58 a share when the company first went public and still have my stocks. I cant speak for everyone but I hope to one day purchase tons of land legally with my bitcoin #goals.