All Forum Posts by: Chase Maher

Good luck @Darras Bell hopefully our paths cross someday. Cheers to your future success.

@Jacob Shoesmith I really like the Reno 203K loan for first time buyers, it allows you to have a rehab budget and you can house hack if thats what your plan is.

Down the road when your portfolio grows a Hard Money Lender is a good bet, but for now, conventional financing is your cheapest and best option. 

Good Luck!

100-150 per SF should be just fine. Its cheaper to go up than it is to go out usually too. I know in SoCal you don't need to pull permits prior to building for any additions less than 500SF unless its Coastal Commission.

@Jeff Ashachik Don't be embarrassed, thats what BP is for. Connecting all types of investors (Newbie, Beginner, Experienced, Pros) in a social platform with zero judging!

As for your question, and this is my opinion and should NOT be taken as the only correct answer, having a deal means anything from a prospective property to having one under contract. "Having a deal" ALWAYS means don't go to a HML without at least having a prospective property that has the spread (Acquisition Price > Rehab > Exit Price) that they will lend on. HML's are asset based lenders. There's a saying, if a HML won't do a deal, its probably not a good deal.

Most HML's prefer to work with borrowers who already have a deal under contract, anything other than that is preliminary work that 99/100 times doesn't pan out. What I have realized, as a lender and investor, that "wasted" time is not wasted at all. Its a learning experience, building relationships and gaining trust.

@James Davis Welcome to BP !

I am from San Diego as well and have been flipping homes here for a couple years with a small team. The market is getting tighter and the inventory is dropping, but there are always opportunities.

As for the down payment money with HML's, the 400K sales price is one way to look at it, but remember for a house like that you'll want to acquire it in the mid 200's. The more money you can put down, the better rates you will get with a lender. If you have any questions about it feel free to contact me.

I buy about a property a month here to flip and use the Hard Money from the lenders I currently work with, if you want to take a ride with me and pound the pavement just inbox me!

Cheers

Bruce,

Excellent post and very accurate. Sometimes the "bait" of a lender is all sizzle and no steak. The true meat of the loan is left hidden and unfortunately can blast the borrower in the end. Interest rate and points is something any lender can make attractive, but the penalties, junk fees, and lack of working with the borrower as problems come up can burry the deal. Another note I would like to add is the available funds of the lender. Are they DIRECT and will they run out on you. The relationship needs to be built, and if the Lender can't keep up with you and their other borrowers than what good is the relationship going forward?

Cheers

I agree with @Joel Owens requesting for a Skype or FaceTime can weed out the scammers.

Most (Nearly all) legitimate HML's and PL's will not charge you any "Upfront fees' prior to closing. This is the mark of a scam. Check their website if applicable, ask for references, and most importantly follow your gut!

It is unfortunate, but scammers have been around for years and they are always finding new ways to fraud. Good luck to you, I hope you find a good honest lender that you can trust and is willing to work WITH you.

Congrats on the flip! It looks like a nice job and perfect sale price. A GC with skills and ethics is like gold, so hang on to him/ her.

Cheers

You haven't missed the train, there's just less seats on it !

Stay focused and find your niche, success will come. Good luck.

Dan,

The inventory locally has been depleting fast for a couple years now, but there are still available deals. To be ahead of the 8ball so to speak, many of my clients and colleagues began utilizing other avenues to get leads. They have still been able to close on deals, though with tighter margins - about 12-15%. Here are a couple things I've noticed to be successful for them, and maybe it can work for you.

Off-Market Deals: Direct mail and cold calling homeowners of distressed properties. Explain to them how they can avoid the 5% cost of sale by selling directly to you, avoiding agents. 100 calls and 1,000 mailers might only get you one deal, but it will be a homerun.

Contacting agents directly: Start calling agents and going to club meetings to get your name out. There have been so many times the highest offer wasn't accepted because an agent had a relationship with a cash buyer and convinced the seller to chose them. Of course it takes a couple quick performing deals, but agents will begin to remember you.

Follow up: Look for properties that have been in and out of escrow a few times. The sellers are most likely motivated and very frustrated the process has had to start over so many times. often these deals are over priced, but meet with the agents anyways.

Unfortunately "easy" deals are long gone, but there are still flips to be had out there. Good luck and happy hunting!

Disclaimer: Assuming you have not been doing these methods of acquiring deals. If you have, don't get frustrated they will come.