All Forum Posts by: Ben Rutkevitz

Hi @Isaac,

Disclaimer: I do not own any real estate. I have been lending in this space for 8 years though. 

I just got a deal in Manhattan at a 5% cap rate. I dont know your area at all, but I am assuming that the cap rate is way too low for your area in a "B" neighborhood. I would see what other properties have sold for your in area and calculate their cap rates. My gut says that you should come in with a much lower offer.

Hi @Logan Hassinger,

I agree, have a conversation with the lender to get more clarity. I looked at the website again and unsecured personal loans like these are normally very expensive. It is not uncommon for the rates to be 3% per month or even more. The amount that these lenders allow you to borrow is also related to how much you deposit into your bank account each month. 

Great question @Cory OBrien, I will let the more experienced investors on this forum answer this one. My two cents would be to stick to the numbers you are comfortable with. Do not begin fudging the numbers because you are frustrated. The right property will come along. 

Hi @Logan,

My first question is if the rate is 3% then why would you look to refi this loan out? You will not get a cheaper rate elsewhere.

I would be very cautious because something doesn't make sense here. I have been lending in the real estate arena for over 8 years and have never heard of these kinds of terms. Unsecured, 3% and 100% financing don't normally go together. 

Now there might be something I am missing here. That is why I asked you the earlier question about which one of their programs are you applying for. 

I would be very wary about giving these guys any money before doing some serious due diligence and seeing the approval. If you would like me to look at the term sheet, I would be happy to give my two cents.

Your reasoning as to why this deal is so appealing is totally correct, but from a lender's perspective it doesn't make sense and that is when I get skeptical.

@Troy Whitney

 thanks for sharing your experiences about Philly. I am from NYC and am considering investing in Philly. I would love to get your management company's info as well. Do they manage the contractors as well or do you do that from Seattle?

I have not heard of this company before. 13% is not uncommon for a hard money loan. 100% financing is uncommon though. Hard money loans almost always take a first lien position on the property. I looked at their website and it seems as though they have loan programs based on different criteria. Which one are you looking to qualify for? 

In general if the net income is calculated correctly (with room for capital expenses and vacancies) and can cover the interest payments then you should go for it.

p.s. as to your question about legal fees, most hard money loans will have the borrower cover some costs before closing so this is common. 

Hi Kathleen, my real estate lending company has used the same lawyer for years now. He is very experienced with NY real estate law and is reasonable with his fee. Feel free to contact him directly, 

Mousa Zalta

[email protected]

I am in a similar situation. I live in Manhattan, NY. I have extended my search to about 100 miles from my home. I am also looking for one-stop shop property management companies in other cities which are growing and have good cash flow opportunities. If you come across any of those companies that seem reputable please let me know and I will do the same.

Welcome to the community @Colin Alsheimer,

Check out the FHA programs including the 203k program as you can get up to a 4 family property (as long as you live in one unit and its your first primary residence) for as little as 3.5% down.

Welcome to the community @Gert VanRooyen!