All Forum Posts by: Cory J Anderson

@Creig Griffin

What you can expect, typically, would be to put down any where from 10% - 30% on purchase.  Some companies may lend only 80% - 90% on construction but most do 100% construction now.

Origination fees any where from 2 - 4 points.  Some charge more if they perceive more risk, some charge as little as a point if you have a lot of experience and a great deal.  On top of your down payment, I would always earmark 10K for closing costs.  And more than that if you are looking for 300K+ loan amounts.  

Most HML have an attorney fee and maybe a processing fee or something of that nature due at closing. But as mentioned above, stay away from any company charging more than a simple credit check fee up front.

@Gerald Thitchener

Any reputable HML should be able to give you a proof of funds. Not all HML are created the same. Some may just hand them out like candy and not care too much about your personal finances or credit situation. Other lenders may want to run credit and background before sending out a proof of funds letter.

All in all, the less they check in to your history the higher the rates may be.  Not a hard rule, but the more perceived risk the more you pay for borrowing the cash.

Hey @Garrett PItts, 

We do lend in Maryland.  When you ask how involved, are you referring to the lending side of it?

We typically do not get involved with the rehab or anything like that.  We simply lend 80% - 90% purchase and 100% reno.  We do have a lot of experience in our office to lend a second set of eyes on the project but we do not get involved directly. 

@Darrell Bratton I would just add, both from a lending and investor prospective.  Try to avoid properties that have occupants.  I am not super familiar with Maryland's tenant laws, but in NJ getting a tenant evicted can be a long and costly process, especially if they know the laws and dig their heals in.  A little easier if the occupant is the previous owner being foreclosed on, but still a head ache.

Not that these can't turn out to be great deals, but it is just something to keep in mind especially if you are just getting started.

Hey Mark,

I do not live in Cali, but we do lend there.  Our minimum loan amount is 100K and our maximum loan amount is 5M.  Anything over that we just take case by case.

Hey Everyone,

My name is Cory J. Anderson.  I am a loan officer for a Hard Money Lender based out of Wall Twp, New Jersey.  We lend in most states and pride ourselves on funding deals that all parties involved feel like they got a win.  We work with new investors as well as seasoned vets.  If I can be of any assistance, please feel free to reach out.

P.S.  ---   Even if you only have a few basic questions on creative financing and how it works.  I would be glad to be of service anyway I can.  Thanks!

@Sedgrid Lewis

It all depends on a few other variables to decide which strategy may be best (and if it is even worth it).  Evaluate each property separately.

I would start with the rent rolls.  Signed leases? When are they up? 

- How much does he owe in taxes? What is he willing to sell for?

- Is seller financing an option? (I would assume no if he is upside down in taxes but who knows)

- How is your "mortgage worthiness"? Meaning, would you qualify for a conventional loan when it comes time to refinance?

The last bullet will be very important to a Hard Money Lender, they will want to see a solid exit strategy.  Also, if the property is fully rented, there are some hard money lenders that offer rental products that are for this exact situation.  I would call around and run the scenario past some hard money lenders and see what they offer.

@Joel Ubiera

Most portfolio lenders do not deal with construction loan type project unless for larger development deals.  However, It is worth a shot.  Never know until you ask.

And who knows, maybe they cannot do anything for you today.  But by meeting your local portfolio lenders and building a rapport you may find your self a lender for tomorrow's bigger deals.  Especially if you would like to eventually use the income from flipping to buy some larger multi family deals.

@Padric Lynch

I cannot speak for every state (I am based in the Northeast) but by in large Hard Money Lender's require this. The reason being is these are high interest commercial loans. Per the federal government and their post 2008 predatory lending laws, Hard Money Lenders cannot lend to primary residence, ever. To add a layer of protection, homes must be bought in an LLC.

That being said, there are special circumstances where a hard money lender may be okay with it. For example, if the property is already under contract and changing from your personal name to an LLC will cancel the contract. It is a case by case basis but it will have to be communicated very clearly that this is an investment project, and not going to be used as a primary.

Do hard money lenders need any special licence to lend in Montana?