All Forum Posts by: Dan Marro

Hey Jason, how are you. It would prob come out to around $3,500. We are still working on it.

Is it best to set up an LLC w a lawyer, or is it straightforward enough to set up on something like Sunbiz or Legalzoom?

Hey guys, question about hard money quote, please advise:

My quote for a loan of ~ $168,000, my first flip

9.5% interest rate (I understand)

Closing Costs

- 1.5% Origination Fee (I understand)

-  $1,495 flat rate Processing fee (I understand)

- $5,000 in 3rd party closing costs (I don't understand)

 In closing costs, I understand they charge you points up front, which goes to title transfer, etc. But I feel like the $5,000 in 3rd party costs is duplicated. That would be around 3 points worth in addition to the 1.5 points on the orig. fee and the $1,495 flat fee. Is this standard? I thought closing costs work out to only 2 - 3 points total, whereas these closing costs work out to around 5.36 points total.

 Thanks for your help,

 Dan

thanks for the responses. David, I am buying in St. Pete/Tampa area. 

All,

 I am getting ready to bid on foreclosed houses with an intention of fixing and flipping. My questions pertain to logistics more than anything else:

- do I need an LLC set up with a funded account beforehand?

- do I need to be pre-approved by a hard money lender before bidding, or are they ready to lend more so based on the potential of the property?

- how do I set up an LLC with an associated bank account, check writing capability, etc.?

 Thanks,

 Dan

All, I asked a banker the other day what terms I could get on a hypothetical 8 unit deal, ~500,000 purchase price w/ 25% down. He said I would be in the 5.25%, 5 year term range and the loan would be conforming. This was Hancock Bank. Sounds like a good way to end up with a negative cash flow. Any ideas what I should expect on a loan? Do banks have personalities and actually care about the people on the deal, or do they only care about hard and fast numbers? Thanks, Dan

Thanks Stanley. Seller financing I am all for, as I am a big believer in aligning incentives. I am not yet ready to buy, as I really want to get some practical experience looking at deals. Long-term, I do want established relationships regardless of if I can do seller financing, but I want relationships where I can get a 30 year loan with a fair interest rate.

Thanks Patrick, I appreciate the feedback. I am definitely not trying to reinvent the wheel, really just want to keep my costs down w/out skimping on anything. With a small first deal, I hear you and I will check out your legal reference. 

Also, I talked to a banker today at Hancock, and he said his bank would likely only do something like a 5 year loan at 5 - 5.25%, personal guarantee(conforming), and an LTV of 75 - 80%. Is a 30 year loan at a decent rate(4.25 - 4.50% area) really not attainable? What if my first deal is a commercial deal(8 units for example), where the property is valued by NOI? I would like a 30-year, non-conforming loan(like everyone else I assume). I have not put this banker in comp. yet, but I am just trying to get a feel of what a conventional loan would look like for me. Thanks

Josh, thank you so much for the feedback, very much appreciated. Also, I want to have a flawless system in place. Any software recommendations to keep track of invoices, rent receipts, financial statements, etc.?

Hey all,

I am looking to close my first deal w/ a partner in the next few months by getting into a duplex to start. I am in the process of building up my team, but I really want to know total out of pocket costs after ALL closing costs are taken into account(legal, financing fees, broker fees, title transfer, etc.). How does that all work? For example:

- Legal would have to set up an LLC, generate standard lease agreements, standard eviction letters, etc. Do they get paid hourly or a flat fee for this type of service, and are my legal costs built into my cost basis, and hence, increase my future cap. gains tax base? Thanks in advance

Regards,

Dan