All Forum Posts by: Dane Fitch

@Peter Ledger most HM lenders will be asking for 20% down instead of 10% now especially if you still want to be in the single digit interest rate and sub 3 points.  if you are needing to get 90% it's still out there but definitely in the 3 points and 12% interest world.  Everyone is pricing in risk that there is absolutely no clarity on, so expect to see rates and leverage change every few days.

Thanks @Tom Shallcross we also now have 18 month and 24 month options (no prepayment penalty) so if you need to put a renter in you can ride this crisis out.  Anchor is also really good right now especially if you have extensive experience.  

@Jay Hinrichs Yeah it's been a wild ride.  We actually have a new broker program that a lot of brokers like.  I think it restarted about 4 months ago.  better fees and monthly interest play. Just like everyone else we did lower leverage to 80% purchase price, no more than 70K in rehab and added 1% to loan rates.  No change in points as we've chosen to add to the processing fee instead until capital markets come back.  I think our best play has been to allow an 18 and 24 month product.  People are able to get some really good deals right now, but they want the security of holding it and waiting this out.  12 month loans might not do that.  These are especially helpful as all the non QM rental loans stopped.

       Jay, do you mind if I ask, if you were a medium size fix and flip and occasional hold investor right now, what would you be doing or looking for?  Or would you step back also and wait for clarity?

I'm totally stealing that J-curve analogy.  I've never heard it described but always the big risk especially when we do take out loans with people who have started rehab.

@Todd Carson you will definitely be hit by all of the Dodd Frank guidelines which is why all hard money lenders make our borrowers sign a document stating this is a business purpose loan and they will not make the property their primary residence.  Very risky from a foreclosure in the sense that they can defintely extend out the foreclosure by using every avenue available to them and if you screw up, they could make it very difficult for you to foreclose and at best make it super expensive.

Fred this will be the new norm.  80% of the purchase price.  Still provide rehab funds.  Probably will turn down extensive rehab unless you have 10+ flips under your belt.  points and fees around 2-3 and rates around 10%.  With these small loan sizes you'll also hit a hefty minimum origination likely around 4K.  Honestly investors should be getting price reductions themselves.  This stuff rolls downhill.  Sellers for sure understand the market is changing.  If it's a killer deal (and if you are buying right now it better be) it's worth the additional lender costs.

Great post!  So many borrowers are feeling the whiplash of their local lenders being open for business and closed the next day.  And like you said the ones that are around have both cut leverage and and added to the cost of the loan literally overnight.  Most borrowers I've talked with are understanding and are going back to their sellers and asking for a further price reduction that netting them 2X to 3X what extra fees are being charged.

     This asset class in general has had an incredible run.  It's really become a hybrid of hard money and private money.  What we've noticed is that the 2 most critical factors that determine default rates are experience (how many flips you've done in the last 2 or 3 years) and FICO score with the former being more dominant than the latter.  This downturn will be a huge test for this asset class to see if it has legs to remain in the 1 point and single digit interest rate world.  I think the experienced investors will keep it alive and lenders will be more creative and flexible for holding terms and potentially rental refinances.  It's all about the investors ability to exit out of the loan and having multiple exit strategies. 

@Bradley Laddusaw do you think these bonds do well and this securitization and institutional money come back?

HI Katie, I have a client in Portland oregon that has a pretty awesome house close to downtown that he is just starting renovations on. They do amazing work. bought for $650,000 and will have a 1.1 million dollar ARV.

Hi Jerry, my partner and I started a whole selling company. We've been mostly doing google adwords, but some of our NOD's are starting to get some traction from our mailers. We'd like to start expanding our list of people to contact. Love to schedule a time to chat or grab some coffee. I'm in the Gresham area.

Visit our Website TheRenewRealtyGroup.com for full photo gallery

Great fixer property available in Beaverton, OR. Lots of new growth is happening and this house is right in the middle of it.

Address:

4055 Tualaway Ave.

Beaverton, OR 97005

Price: $240,000

Repairs: $40,000

ARV: 320,000+

Highlights:
– Large yard with deck
– Large kitchen area
– Living and family room areas
– Garage with additional shop space
– Walking distance to movie theater, gym (LA Fitness), dining, shopping and more
– Very close to Nike corp.
– Brand new McMenamins (very popular dining & bar location) being built 2 min away
– Quick access to two main freeways.

This would make a great flip or Brrrr (buy and hold) lots of apartments and rentals in the area because of demand. It has all the close proximity amenities tenants desire.

Give us a call to set up a showing or to get additional information. 971-221-5574

Visit our Website TheRenewRealtyGroup.com for full photo gallery and additional properties available. 

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