All Forum Posts by: Caitlin Davis

I can get this done. DM me! 

Hi Mayur. Plenty of investors start this way, and it's a great idea IF the numbers work. This is not something you would want to "hope for the best" with. You’re pledging your primary residence as collateral, which increases your overall risk. 

When underwriting potential deals, it's crucial to include all interest costs from the HELOC in your expense calculations. Run projections for different rate scenarios to ensure you'll still have positive cash flow even with rising rates. That way, your final purchase price and ROI estimates accurately reflect the true cost of using a HELOC.

There are so many options out there but 100% financing is very risky, especially for your first flip. 20% down + 100% of rehab would be a good loan for you to get started. Closing costs such as processing fees + underwriting fees shouldn't be more than $2,000-ish. Using 100% financing means you’re borrowing every dollar for the purchase and rehab, which can leave you overleveraged from day one. If renovation costs balloon or sales prices drop, you’re on the hook for more debt than you can handle. This lack of equity (or “skin in the game”) can create cash flow strain, limit your options for exit strategies, and potentially lead to foreclosure if the project doesn’t go as planned. Having your own funds invested also provides a buffer against unexpected costs and motivates you to manage the project carefully, ensuring better decision-making and stronger relationships with lenders. 

@Jonathan Klemm I originate private loans, so I also handle the financing aspect. I'm not the underwriter who approves the loan, I just know what they need which is usually a thorough overview and proof of recently completed projects, where you were the GC. 

It's all about how we structure and present the experience you do have. I'm great at putting experience packages together for underwriting, and I know exactly what they look for when there's no direct construction experience verifiable by title. I also used to work at I Fund Cities! They're cool, but let me know if you have a hard time reaching them or want another option to consider. 

Many national private and hard money lenders do not lock rates until the appraisal is completed and approved because the numbers that come back on the appraisal really impact the pricing, if the market rent/values are off. If the "inspection" you’re referring to is the appraisal and there were issues causing delays in its approval, that could explain why your rate increased since they've been a little volatile lately. However, this wouldn’t typically happen directly because of the appraisal issues themselves, unless factors like low market rents or a lower-than-expected appraised value shifted your loan into a different pricing tier.

You will want to structure the LLC operating agreement where the lowest credit scores own the least in the LLC. If it were 3 investors for example, and 2 have low credit scores, you'd want to have them at 10%, 10%, and you at 80% so your higher scores can be used.

I can do a cash-out refinance at 3 months seasoning. Let me know if I can help you with that. 

Most lenders require 6 months seasoning to use the new, higher appraised value. I can get this done at 3 months. Message me if you'd like more information. 

Yes, I am licensed in New Jersey as well.