All Forum Posts by: Bobby Feinman

Awesome post! Another option is investing in a private lending fund. the investment is diversified over all of the loans in the portfolio without the headaches of ownership, maintenance, tenants, etc. It's a great way to be in real estate and "be the bank" instead of the owner with an attractive return.

Bobby

1 Vote

Orlando, Florida

@Christopher Mancini

Hey Christopher, happy to assist!

0 Votes

Asheville, North Carolina

not if you're comfortable doing it.

0 Votes

Saint Louis, Missouri

@Paul Winka

Another important point in addition to the ones already provided is to create a separate LLC for each DSCR loan that you do for asset protection purposes. Don't put multiple properties in the same llc unless you have to. The only time you would have to is if the loan amounts are not sufficient (100,000 min per property.)

Bobby

0 Votes

Saint Louis, Missouri

@Beth Johnson

Well said. My sentiments exactly which is why we do not charge a commitment fee.

Bobby

1 Vote

Well said. My sentiments exactly which is why we do not charge a commitment fee.

Bobby

0 Votes

Quote from @Jeff S.:

@Alexis Gonzalez & @Natalie Lykes,

Some will come back here and say they require an application fee, also euphemistically/laughably called a “commitment fee.” These can be legitimate in large commercial loans. Lenders that require an application fee for any loan most on this board might need are all but going the way of the dinosaur. The industry is just too competitive now to take that seriously.

Maybe bad form to quote myself, but this cuts both ways, @Bobby Feinman. When I see the words, “Commitment Fee,” I sometimes wonder where the commitment is from the lender to show they can follow through and not leave a borrower hanging. Of course, we occasionally have borrowers walk from a property. All lenders do. It happens so infrequently that I view it as a cost of doing business.

You can use terms like “refundable” or that you are not asking for the “entire origination fee upfront,” but only a portion. Does it matter to the borrower? With all the actual scams and scam warnings out there, do you really want your business to be known as one that charges an up-front fee? I’d wonder about the amount of business this would scare off just on its face.

Do your loans fail so often that it's hurting your bottom line? If so, I’d respectfully suggest that you reevaluate who you are lending to or how you are attracting these borrowers. I know you might not think of it like this, but I’d question penalizing all borrowers because of a problem with a tiny few or a tiny amount of their deals.

What about a monster borrower? I know you know what I mean. They always have an occasional deal fall thru and nickel and diming them is not a great way to encourage business.

Who are you attracting?

It’s your business and you can run it as you wish. Just trying to be helpful. Borrowers have so many choices now that this hardly seems like a good solution to what I hope is more of an annoyance than a significant problem for you.

(And no, to be blunt, no borrower should be paying any upfront fee. Sorry.)

Jeff -- just to be clear, we currently do not charge any commitment fee. I was simply responding to Alexis' post. As far as the "commitment from the lender to the borrower", you make an EXCELLENT point. Unfortunately, we get calls weekly from borrowers who got burned by so called lenders or brokers that could not deliver. One of the things that is great about BP is the ability for people to leave reviews. Borrowers can learn a tremendous amount about a lender through their reviews on this site.

Bobby

1 Vote

Quote from @Beth Johnson:

@Alexis Gonzalez

Never work with a private lender who asks for money upfront and doesn't work through a title and escrow or attorney for signing, recording and funding the loan. This is for both party's protection.

Most PML won't ask for an appraisal on a bridge /short term loan and if they do, you could always pay for it directly which is normal.

Beth

I respectfully disagree with some of this post. We currently do not charge any upfront fees other than those to cover credit report, background check, valuation, etc. HOWEVER, we have been burned several times by borrowers who decide not to close literally on the day of closing. We are considering charging a commitment fee of a portion of the origination fee upfront to resolve this. As long as the borrower closes, it is credited at closing towards their origination fee. If CCF is ready to close and the borrower simply changes their mind, then that fee would not be refunded. I certainly think that is understandable and appropriate. NOW if a lender/broker asked for the entire origination fee upfront, then that is not acceptable and borrowers should run from that!

With respect to valuations on bridge/short term loans, we always get some kind of valuation, whether it be an appraisal, BPO or hybrid. We have the borrower pay that directly.

Bobby

0 Votes

@Christian Paulson

Christian - I am a nationwide private lender located in VA Beach. Happy to assist you.

Bobby

1 Vote

Virginia Beach, Virginia

@Aaron Brockup

Hey Aaron, we specialize in long term rental loans. Happy to help any way I can.

Bobby

0 Votes

West Gulfport, Mississippi

All Forum Posts by: Bobby Feinman

Bobby Feinman has started 19 posts and replied 211 times.

Post: Would you rather be a private lender or own rentals/rehab?

Post: Looking for Private Lenders that do deals in Asheville / Boone

Post: DSCR loans and LLCs - which state?

Post: DSCR loans and LLCs - which state?

Post: Using Private Lenders

Post: Using Private Lenders

Post: Using Private Lenders

Post: Using Private Lenders

Post: Help on my next deal

Post: Lenders for SFH rentals

Bobby Feinman has started 19 posts and replied 211 times.

Rounded Star Post: Would you rather be a private lender or own rentals/rehab?

Rounded Star Post: Looking for Private Lenders that do deals in Asheville / Boone

Rounded Star Post: DSCR loans and LLCs - which state?

Rounded Star Post: DSCR loans and LLCs - which state?

Rounded Star Post: Using Private Lenders

Rounded Star Post: Using Private Lenders

Rounded Star Post: Using Private Lenders

Rounded Star Post: Using Private Lenders

Rounded Star Post: Help on my next deal

Rounded Star Post: Lenders for SFH rentals

Post: Would you rather be a private lender or own rentals/rehab?

Post: Looking for Private Lenders that do deals in Asheville / Boone

Post: DSCR loans and LLCs - which state?

Post: DSCR loans and LLCs - which state?

Post: Using Private Lenders

Post: Using Private Lenders

Post: Using Private Lenders

Post: Using Private Lenders

Post: Help on my next deal

Post: Lenders for SFH rentals