All Forum Posts by: Ben Stoodley

@Brian C. we have a lot of clients use private money to acquire the property and renovate or add value to the building in order to increase rental rates to top of market. After 6 months-1 year they will refi out with a more conventional long term loan product. Seems to work real well for them. Hard money get the acquisition done quickly and easily, along with the renovation costs financed as well. Then you just refi out as quickly as possible into better rates.

Hi @Taylor Guest ! There are numerous posts on this site about financing real estate investments, but I think the basics are pretty straight forward. There are always a few options, but, the best one will depend on your personal situation. Most people advise not to use Hard Money on your first flip because if you run into a problem delaying the resale, you are paying high interest rates until it sells. What this all comes down to is your experience and confidence in your due diligence. There is no question hard money is expensive, but there is a reason why all the big time flippers use it - it drastically increases your Cash on Cash ROI, meaning your personal capital will be spread out over much more projects, in turn leaving you with much more profit. It is all about the numbers. If you do your research correctly and the numbers work, then go for it! Best of luck and feel free to reach out with further questions.

@Darian Eldredge I believe you are saying you are a private investor in this project. The Flipper is buying the house, using a hard money loan for most of the purchase, and you are lending the Flipper $20k to help with closing/holding costs. Is that correct? If so, yes, as was mentioned before, you will not be in 1st position as the hard money lender will have that 1st position TD. You can go into 2nd and have an agreement with the Flipper to pay you back the $20k plus whatever equity split and/or interest payments. This is a much less secure position. However, it is done all the time. A very large amount of my clients that I lend to, use other investor's money to help with the down payment and holding costs. Sometimes they use a 2nd TD and normally they have an agreement between the parties. They tend to charge a much higher interest rate, or at least a decent equity split, since the actual borrower doesn't have much skin in the game. Hopefully this helps. Best of luck.

Hi @Brent T. and Welcome!

Good to see more fellow SD investors on here. I'd suggest joining a team of investors if you are just starting out, especially if  you don't have much experience. There are many good RE investment groups around SD that offer good information. I'd suggest at least the monthly meetings for FIBI and SDCIA. They tend to have very good speakers and many people there willing to help and possibly build a team together. Building a team is essential for this business, especially in Southern California, where the prices are very high. Having team members allows you to pool money together for the down payment/holding costs and also increase your network outreach, to assist in finding those "diamond in a rough" deals.

You'll find  a lot of mixed opinion about starting out with Hard Money, and I would personally agree with most of them. Hard Money is an essential tool in most fix and flip businesses, but it is expensive and isn't always your best option. However, when used right, it can help expand you business very quickly.

Feel free to reach out and ask any specific questions you have. I am always available to help.

Thank you and best of luck!

Ben

Hi @Shannon Shue and welcome (officially)!

You've certainly turned to the right place with such a huge community of helpful people that have a wealth of knowledge.

LA is a great place to begin and meet your goal of 3 flips this coming year. We see great, continued activity in the county.

We are right down the road in SD with one of our associates in LA. New investors/borrowers are always welcome. We always offer full explanations, opinions and tips on real estate investing.

Best of luck with everything and if you ever need anything feel free to contact me!

CALL NOW FOR YOUR SAME DAY APPROVAL!

• 9.99% ~ 12% Interest
• Up to 65% ARV (Up to 80% Purchase + 100% Rehab Costs)
• 2-4 Points
• 6-24 Month Term
• Funding Within 3 Days
• No Appraisal Required
• $50K-$5MM Loan Amounts
• Same Day Approval
• No Prepayment Penalty
• No Upfront/Junk Fees
• Non-Consumer Loans Only (NOO)
• 1st Position Loans Only
• Commercial/Residential - Flip, Hold, Build

Phone: (619) 777-8790

Email: [email protected]

Apply Online: www.lantzmanlending.com/apply/

CA DRE #01522724 NMLS #296471

Hi @Shawn Smith, welcome to BP! Seller financing is a popular method used by many of my clients. They set up a seller carry back of about 20-30% of the purchase price, then use our financing for the rest of the purchase, as well as 100% of the renovation costs. Seems to be a fairly common agreement in situations like yours, with a highly motivated seller. To my understanding, this is something that their Realtor negotiates with the Seller/Listing Agent and is put into the Purchase Agreement. Your Realtor should be familiar with this. Being sure and hiring a real estate attorney is never a bad idea. Best of luck!

Contact me for a fast quote!

• 9.99% ~ 12% Interest
• Up to 65% ARV (Up to 85% LTC + 100% Rehab Costs)
• 2-4 Points
• 6-24 Month Term
• Funding Within 5 Days
• No Appraisal Required
• $50K-$5MM Loan Amounts
• Same Day Approval
• No Prepayment Penalty
• No Upfront/Junk Fees
• Non-Consumer Loans Only (NOO)
• 1st Position Loans Only

Thanks!

Ben Stoodley

Phone: (619) 777-8790

Email: [email protected]

Apply Online: www.lantzmanlending.com/apply/

CA DRE #01522724 NMLS #296471

Hi @Ana Orsini - were you ever able to give this a try? Thanks!

Hi @Kelly Howard,

There is debate between Private Lender vs Hard Money Lender. They are very similar, but yes, as Brie mentioned, usually private lenders are individual people that are referred to you or friends/family. I think the only way to check out these true private individual lenders is to ask for references, ask to speak with other people they've invested with. Hard money lenders on the other hand are a little easier to vet. They will all tell you their interest, points, LTV, requirements, other fees, etc. Most will be in the same range. Ask how many loan/how much they loan every year to get an idea of their activity. Talk to other borrowers. Be sure their borrower requirements aren't too demanding. ALWAYS ask if they are the DIRECT Lender, and if so, they should be able to close within 5 days. Also be sure to ask for prepayment penalties (there should be none), fund control fees, and any other fees associate with the loan (besides points). These are are the "junk fees" that many people complain about and can definitely be avoided. Every HML will need a deal to look at in order to provide you with a quote, as they are asset based. It will seem expensive to you at first, but it is the best way to approach a fast turn around fix n flip type of project. Run your numbers including all holding costs and costs of money to make sure the project makes sense, then go for it! Good luck!