All Forum Posts by: Caleb Jordan

Rate's won't go down even though fed rates did. It is suddenly higher risk and uncertain, we don't know if this will be a month or 6 months. It will vary a lot depending on the individual lenders. Some hard money lenders will probably be a lot more apt to pass up newbie investors.

There are so many different models out there in how hard money lenders work, so it may cause some to stop lending altogether and other may be barely affected. But I'd imagine every hard money lender is at least taking a 2nd look at their loan terms and risks. 

One big concern I see is permits being put on hold and it messing up rehabs that need permits to be done properly. Suddenly having possibility tons of rehabs put on hold in tons of short term loans is not good for a lender that does tons of rehab loans.

 We had revisit our loan terms and tailor them light of this crisis.

If you use hard money to acquire a property you will have to pay closing costs on the initial purchase as well as on on refi. So hardmoney does not save you from paying closing costs twice.  You are pretty much going to have to pay closing costs twice in the brrrr method and you'll need to factor as a cost going into any deals.

The mortgage that the seller holds is an asset. Ask any banker.

Ummm...mortgage is an an asset to the BANKER not the borrower.

There are option out there for longer term loans without the restrictions of normal banks with tax returns etc. Some hard money lenders offer these type of loans and then there are non qm loans. It will be higher rates then conventional but hopefully alot lower than a typical short term hard money flip loan.

 It is best to have a discussion with a lender and even try to get preapproved ahead of time. They can tell you what sort of terms and projects they would fund for you. Then when you find a deal run it by the lender.

You can explain to seller you are using hardmoney/private money. If you are using financing you don't have to have financing contigency. But if finacing falls through and you don't perform you lose earnest money in that case. I've seen contracts with clients using hard money come across my desk with and without finacing contingencies. Some want that protection and get finacing contingency tben others know waive it in order to make offer more attractive.

@Nicholas Groover

The 3k is paid before you even have a property.

points with most lenders are usually paid on day of closing along with down payment.

You may find a lender that can let you transfer property out off LLC into your name during refi.

I'm not sure if lender would want it to be your primary before refi, or just intend to make your primary. The reason I bring this up is that most hard money lenders do not want you living in property while their loan is on it. 

My guess would be that many lenders would be hesitant to give you loan to purchase property from your LLC. Since you own LLC you are basically buying property from yourself. There are too many shady people who would use that to launder money and what not so I don't think banks like to do that.

 12% and 1 point is pretty good.That is if it was actually 1 point and there was not some back end charge.

You might find lower hard money rates, but probably not points. And often the points are more significant then rate, esp if you are only in loan for 2 or 3 months. 

 They have been discussed on here before. I also talk to many prospects who have been in touch with them

There have been people with good experiences with Do Hard Money,  so they are a real lender. Most people find the 100% finance offer attractive.

Biggest complaint I hear is if you end up not using them you are out 3 grand. I personally would not put up 3 grand.

Secondly people have said they are so selective in deals they fund that a person may never find a good enough deal. 

 Most hard money lenders don't like seller financing in combination with their loan because then someone else has lien on property. You looking for a lender that allows 2nd lien

Then secondly no skin in the game as already mentioned.