All Forum Posts by: Austin V.

Count me in. Serial Entrepreneur here that has been working on something in this space part-time for several years. We have been actively working to put together the talent pieces that could eventually produce something fairly extraordinary.

@John Thedford

I’ve never heard of Conventus but will give them a look!

@Tim Johnson I would appreciate a referral!

Like I said, lots of funders who like to have my .org jump through hoops and then never fund.

I am an experienced investor who has 75ish transactions going at a time. Up to this point, I have lived on hard money loans from friends and family and my own capital. I average 5M+- borrowed at any one time for these projects. Recently, I have had a significant upswing in demand in my market(I build and flip homes outside the metros in AZ) and I no longer can get by on just the same sources of cash I’ve used over the last few years. The trouble is that many of the same lenders I have used over the years are all maxed, I have even made calls to more "emotionally expensive" sources (EX. the types that call you to let you know that they have concerns about shingle color on the house they lent on and think it should be changed, two to three times a month) and even most of those are tapped. 

I know that this is more a local problem with the big growth my building area is going through, mainly because of the smaller sizes of the cities and towns, in which I operate. I have found that fewer big-city funds are aware of, or want to lend and be competitive in my markets due to the complexity of lending and doing inspections at a distance. For the last six months, I’ve been dabbling in trying to find a long-term debt partner. I seem to work on it for a few hours and then find a band-aid to fix the short term and get pulled back into the business. 

I recently had a funder who contracted cancer and who has decided to shut off the tap. I obviously understand that he wants to be careful with his money given his health concerns but it has put me in a bit of a bind as he was due to fund draws on seven projects for which he holds the first lien(several of which are presold). Does anyone know of any groups or an online site that would be a good place to present these deals and find a longer-term partner? I have traditionally offered good security at a 75% LTV and 15% interest with no points but at this point, I am starting to get more flexible. I have about 1M in equity in underfunded deals and probably sitting on close to 2M in unfunded deals overall. It's starting to hold up progress on the project side. Thanks in Advance!

Hey All,

I currently owe 1.25M(which is overdue). To complete all the horizontal I need another 1.05M. Total loan amount to get to finished lots is 2.3M+-. 

@Jay Hinrichs I appreciate your candid feedback. I would love to be at 1 point and 6% on a deal like this. How long did it take for you to get a good enough relationship with your commercial bank to back a deal like this? I usually have 5-6M out on Fix and Flips and New Construction at any one time, so getting to a lower cost of capital would be really big for my business.

I have a Multi-Unit Townhome project that was originally plated for 170 lots. Utilities are in, phase one of the roads, curbs, gutters and water retention has been completed as well.

I have received approval from the municipality to build the project as duplexes that will optimize cash flow and raise the number of finished units to approximately 300.

I owe 1.25M and need 1.05M to finish the roads, curbs, gutters, and water retention.

The first lien(1.25M) is overdue and was intended only as a bridge.

The finished value of the subdivision would be 3.4M -4.5M as finished lots, depending on the comparables the appraiser uses.

I have also found a lender that will lend to take the first out, but his points are high, it's not hard to get very expensive in points on a loan size like this.

I am outside the Phoenix and Tucson markets in a smaller but rapidly growing area. Given my area, it has been tricky to find someone that will both lend in this setting, especially in these amounts, for infrastructure, even with the equity intact.

Does anyone know of a someone who may be able to touch a project like this?

As an aside, I will need additional funding to build the project 100+- units at a time. It's funny, but I have quite a few lenders that will lend on that project :). In a perfect world, I would love to find a lender that can do both.

Thanks!

The worst PM experience I ever had was in renting small apartment units in Phoenix. My tenant, who I only met once was a middle aged lady who only spoke Spanish, I rented to her and then turned the property(4-plex) over to a PM a month later, she had all the right legal dociments but in hindsight she probably was not here legally. The PM was awful, he never rented a single unit, was expensive and stangely enough this lady stopped paying rent after the first month the PM took over. PM recommends we evict her, which we do. After 6 months of PM managing I fire him and decide to sell. When I go through the property to ensure utilities are on for the buyer(I didn’t live in the area) a neighbor comes from across the street to tell me what really happened. Aparently, the PM was pocketing the cash that this lady was paying for rent and recording it as never being paid, after several months he then pushed the eviction, whIch I paId for. Really heartbreaking, the lady had a 5 year old son and worked cleanIng houses, I believe this is a special place in hell for PM.

I am curious what source of funds everyone is using for deals.  Especially for those that have done a few more deals and have exhausted "Friends and Family" money.

Currently, I am considering using:

"Builder Finance"

"Finance of America - Commercial"

"Lending Home"

Most of these sources require that you have verified experience and when you include their points the mixed rate is 8-10% APR as best I can tell. Anyone have experience working with these lenders above or others like them and have feedback?

Besides cost ease of use is another huge factor that I take into consideration when trying to find the best source of funds. I have found it is worth it to pay more in interest so that I can spend the time finding other deals in lieu of chasing down a W-2 from 2 years ago etc.

Further relevant information.  I am in AZ and have 5M+- out at any one time on Flips and New Construction.

I need a good combo Spec/ Rehab contractor that can handle multiple projects. Most of the GCs I am running Into want to take there premium and just let the subs run wild. Being overtime and over budget. Any hungry good ones out there willing to put in the work and make a lot of money?

A shared well agreement shouldn’t be so complicated that you can’t use a boiler plate form to get it done. I have done several of them and have never had a issue. If you really want to use an attorney, I have used Bill Kozub as well as Greg Larson from Larson and Simpson. Both have done great work.