All Forum Posts by: Boris Grinberg

@Nicholas Wootten if you already obtained a first lien mortgage and looking for a second lien hard money, it will be tough to find as HML typically lend on a first lien basis. However, if you put a lot of cash in the deal and just looking for a modest amount for rehab as a first lien - it should not be difficult to find, unless if you are looking for a small loan amount. (This topic has been covered in this thread already).

We are a hard money lender and we are using some inspectors that have worked or are working with big banks and it is not that easy/simple. I can't speak for all HML, but the framework/processing speed/accessibility should be a lot more streamlined for HML. You are paying a higher rate and simplicity and speed are expected. Contact me directly, am happy to describe how we run the constructions funding process.

I am a hard money lender and agree with @Jay Hinrichs. Go to HML, do a few flips and keep some dry powder in case of emergency. Small loans are more compex and you will struggle to find sensible rates below 75k. Above 75k it all depends on your LTV. 75-80% should get you around 9-10% and 1-2% upfront. Above 80%-85% LTV will cost you more. These numbers based on Loan To Cost.
If you have any specific questions, happy to chat. 

@Charlotte Edwards if you are looking for investment opportunities and have someone like your sister invest for you and you trust her, it is not a bad way to go about it. You may not make the best returns, but you help your sister, you get what you want and you sleep well at night.

In terms of a proper split, we see JV proposals/offers from investors who are looking for our funding and, in return, they offer us 50% of equity. If your sister is planning to work on this project part time, you may be able to get a slightly better deal.

But I am not sure you want to be a hard money lender for your sister. I am a hard money lender but would not walk down that path with my siblings.  

@Chad K.

We are a hard money lender and FICO score has very limited to no use in our credit review. It is really about LTV, property quality and location. However, if FICO score is low, we spend time trying to understand the reasons for that. Having said that, I don't think it is so unique. The whole idea behind HM lending is asset based lending so minimum FICO score with some lenders puzzles me.

Heather, are they providing 100% financing? If not, it sounds too aggressive.

I suspect you only partner up with a contractor if it is a complicated rehab and he can prove that he can find subcontractors cheaper than you. If the rehab is simple and you contribute all cash, the partnership incentive is not clear.

thank you @Jered Sturm.

As a lender, my upside is limited to 10% per year. My borrowers have a cap rate of 5-10% depending on location, but 10% property price appreciation gets them 25-40% increase in equity profit (because of leverage via mortgage/loan). 

I make a sensible profit in lending, but this is not a long term passive income creation. These loans are 6-12 months so there is no long term play.

As such, I do both, lend money and own real estate. Lending pays my bills but real estate is building my nest..

@Jered Sturm. I am not tax expert, but i thought that if you use depreciation, you just build an equity in your investment property. If you sell the property at some point, wouldnt you have to pay tax on capital gain that increased by the amount of the cumulative depreciation? I was told the difference is really how one is being taxed as ordinary income vs capital gains.

@Chris Virgil-Stone: We don't lend in Georgia so just an advice:
- Avoid guys that ask for upfront payment for application/processing (appraisal is OK as it usually goes to third party). I hear about some lenders that make a good amount of money from just charging people high fee but only occasionally delivering a loan.

- Get the list of all expenses in writing upfront. That should include all legal fees, charges and reserves for property taxes. Our offer letter includes all of these fees upfront so there is no confusion for our borrowers.

Good luck.

Boris