All Forum Posts by: Ben Stoodley

Welcome   @Gabriel Contreras ! You will certainly find a lot of networking potential on this site, it's the best. I've seen a lot of good deals in Bakersfield, good location! 

Great post  @Account Closed , very common misunderstanding in the HML transaction process!

Make sure to take advantage of all our loan products, like the popular FIX N FLIP loan product! 

• 9.99% ~ 12% Interest
• Up to 65% ARV (Up to 80% LTC + 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

Ben Stoodley

Phone: (619) 777-8790

Email: [email protected]

Apply Online: www.lantzmanlending.com/apply/

CA DRE #01522724 NMLS #296471

Hi @Wardell Picquet,

As you can see from this post, your best bet is almost always a private lender, like @Rodney Marcantel. Take advantage of these opportunities when you can. As a private/hard money lender, I would think that you can find someone to finance around 80% of the Purchase + 100% of the Rehab costs, so your "skin in the game" would be around 20% of the purchase price + closing costs. That is a pretty high end LTV in my HML experience. Every lender is different, just need to discuss the project with a few to see the best fit.

Regarding points/fees/rates; these will range from every lender and many times will depend on the borrower/project. Usually, there is no credit requirement, but experience always helps. Origination points will range from 2-5 points. Junk fees will range from $500-$3000, most all of which are unnecessary. Always check to make sure there is no prepayment penalty. 

Hope this helps!

Ben

Hi @Keishee Hill,

Every deal is different. Some flips take 2 months some take 20 months! I say on average we see pay offs within 4-6 months. You're right, we like many other HMLs charge less points for a 6 month term vs a 12 month term. If  you are pretty confident you can finish within 4-6 months after your contractor has committed to an estimate and you've studied the market time, your best bet would be to get a 6 month note with No PrePayment Penalty and also make sure Extensions are available.

Good luck!

Ben

Hi @Rick Zink

Congrats on your successful real estate investing thus far! In my experience, most Hard Money lenders will not require any programs or equity deals, just debt financing. For example, we typically fund between 70-80% of the Purchase price in addition to 100% of the rehab estimate for our Fix n Flip loans. There is almost always some "skin in the game" requirement from the borrower, in our case generally between 20-30% of the purchase. I assume this is where your Gap lender will be coming in?

If so, just make sure your main lender providing you the bulk of financing will allow a 2nd TD on the property, most shouldn't have a problem. The Gap lender's rates are typically a little higher than the lender in 1st position.

Another option is to work with a lender that allows the down payment/skin in the game to come from other sources such as Seller Carry Back or Cross Collateral. This would potentially allow you to acquire and flip the properties with no money out of pocket (besides closing costs and interest payments). 

If you need any help on sourcing lenders or qualifying them, please don't hesitate to ask. I write many articles on the importance of selecting the right lender for  you and tips on how to research them.

Thank you and good luck!

Ben

• 9.99% ~ 12% Interest
• Up to 65% ARV (Up to 80% LTC + 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
• CA, NV, AZ & TX

Phone: (619) 777-8790

Email: [email protected]

Apply Online: www.lantzmanlending.com/apply/

CA DRE #01522724 NMLS #296471

Hi @Daryl Williams

Welcome! Hope everything has started off well for you so far. Finding a reliable and proven hard money lender is a process. I suggest starting this process now, as it seems like you are, and continuing it through your first few deals. Find a lender that is a great fit for your business and you will be very happy. Here are some tips on finding a good HML:

• DIRECT Lenders: I strongly suggest working with direct lenders to avoid the possibility of your deal falling out due to financing changes. Direct lenders should also be able to close very quickly after commitment, 3-5 days.
• LTV: you'll need to ask to see their underwriting matrix on how they determine your max LTV and from that how they determine your rate and fees. Generally, most lenders will go up to 65-70% ARV. This will generally be compared to the LTV of the purchase price as well. Most all lenders will require some "skin in the game" or a downpayment.
• Down Payment: I've seen as low as 10%, 20% is more common, and 30% is a safe number to prepare for. These percentages are related to the purchase price. Most lenders will finance all of the rehab expenses as well (make sure they do). 
• Rates/Fees: every lender is different and determines rates from different variables. Generally speaking, the higher the LTV, the higher the interest and fees.... the less experienced the borrower, the higher the interest and fees... the less amount of supporting comps, the higher the interest and fees. Basically, higher risk = higher rates/fees.
• Junk Fees: need to call each lender and ask what all associated fees will be applied to the loan. They tend to be processing, appraisal, draw, underwriting, carrier, etc named "fees" , all unnecessary. 
• Asset Based: most all hard money lenders are asset based, just confirm to see how they underwrite deals and determine rates. Ask if there is a min credit score or if any proof of income is needed. 

I hope this helps you out when searching for good HML in your area. Always call the lender and talk it over with them. They are almost always asset based, so they'll need to see a deal in order for them to produce a quote. However, you should be able to figure out any junk fees, pre payment penalties, etc. to cross some lenders off your list.

Good luck!

-Ben

Hi @Elias Meek

 I can only answer from experience with my company, but we always allow for extensions given you are paying interest on time. Depending on the length of the extension request, it may cost you a half point or a point. However, if you are in Escrow or close to selling the property, there is a good chance a lender won't charge you anything for the extension.

Let me know if you have any other questions.

Thanks!