All Forum Posts by: Daniel Rutledge

I have no issue with the partnership. The margin is a bit tight so I would really work out the numbers for a worst case scenario and if you are ok with it at that point then its a go. If you are not ok with things not going as planned then possibly not. Are there other deals in your area that might give a better return?

I began searching for podcasts on real estate to listen to on my commute each day. I found BP and after listening to a few podcasts I went back and listened to everything for the last two years. I have not missed one since and have learned so much I took the plunge with getting my first home under contract this month. I really feel BP has given me so many tools to make the dive into REI! I love it and wish I had found it years earlier. Thank you BP!

Thank you for your feedback and yes its an individual that is part of a local REI group. He also responded with clarity. I just wanted to make sure.

I tried to tag Brandon Turner and David Greene but I guess I can't without a pro account.

I have a deal under contract and quickly pulled the trigger with a hard money lender to get it fast. Now I am a little concerned with some things written pertaining to the hard money loan. Here is the list given to me:

Specification for mortgage and note:

1. Maintain insurance and provide proof of insurance showing mortgagee as additional insured prior to closing.
2. Late fee of $50 of any payment received after the 10th of the month.
3. Payments due on the first of each month.
4. Any unpaid interest will be added to the principal amount and bear interest at the same rate.
5. Borrower to pay any attorney’s fees or costs of collection
6. Borrower to provide mortgagee title insurance guaranteeing a valid first mortgage
7. Borrower to pay all closing costs including preparation of note and mortgage
8. Borrower to pay attorney fees and title fees for closing
9. 12% Interest only for 3 years paid monthly then balloon payment
10. $1,000 pre-payment penalty if paid off in part or in full within the first 12 months
11. $500 pre-payment penalty if paid off in part or in full within the second 12 months
12. Personal guarantee from the individual involved
13. Interim interest for the month of closing
14. No origination fee
15. No points
16. No appraisal fee
17. No credit report
18. No substitution of collateral without my consent.
19. Interest due through the end of month of pay off
20. Mortgagor will have the option to extend the note on a month to month basis subject to consent of mortgagee
21. Collect interim interest for the month of closing
22. First payment due June 1, 2018
23. This will be a purchase money mortgage so you will need to close the sale for the buyer and seller

Couple of questions for the experts. #4 does this mean I will owe the total interest of the 3 year loan even if I plan to refinance it at the 6 month mark? If not, what does it mean? #7 Does this mean I am to pay ALL closing cost including what is normally paid for by the seller? #12 does this mean this loan will show on my credit report and impact (drastically) my DTI?

I am really hoping I can get some feedback from the experts here. Thanks

Hey all. A recent post about lending club and prosper made me think of something and I wanted to know if it is something already being done. With there being so many private lenders to use when buying real estate I wondered if any of those lenders ever lend money for another purpose. Lets say someone wanted to get started in real estate but first wanted to work on getting his debt to income ratio down a few points. Lets say this guy has a good credit score but has several credit cards, a small auto loan and another short term loan with a high rate. He could go to lending club and consolidate it but it likely will not lower his dti because lending club will not loan more than 60 months making his payment for the one loan as much or sometimes more than the debt he is consolidating. If a private lender would do a direct loan for say 10 years at a rate of 10-12% then the monthly payment would be much cheaper and increase the guys cash flow. Also it if were done outside of the credit system it would drastically increase his dti and possibly add to his already good credit score. This would allow the private lender to get a nice return over a longer period and may allow the borrower the ability to more quickly get into real estate investing.  Of course there is a higher risk with lending to one person Vs being a lender within lending club where things are spread out among multiple loans but the upside is good for both sides if it worked out. I would like the opinions of those who are already somewhat in this space. Is this type of loan anything someone has done or considered?

Chris thanks for the feedback. 

3Originally posted by @Chris Ellis:

Down payment amount requested is certainly something to consider. Rates is another. Also if the rehab costs are covered or not and where that money is going to come from. Most lenders will structure it as an interest only bridge for 12 to 24 months. Then once a tenant is in place, renovations done, and you have had ownership for 6 months is when it will be a good time to start considering refinancing. 

Hello all. I looked over the hard money lenders on BP and I am unsure which direction to go to fund my first deal. I am looking at deals that all in after repairs will likely be under 100k. I am in SC if that matters in which company to work with but I would love some feedback on choosing a hard money company. I am looking at homes to BRRRR so the money will be short enough to get a refinance which I would not have problems qualifying for. I have things in place with doing the rehabs and a property manager ready to go but I need to make a decision on where the money will come from. What things should I consider or look at when choosing a lender? Thanks.

Hey everyone! I am wanting to take out a HELOC on my primary in order to invest but i had two questions unanswered. My home is 4 bedrooms but there is another room that is basically a bedroom without a closet. Would it be better if i added a closet to show it as a 5 br or is it even worth it going from a 4 to 5 to force equity? Also dors the br have tp be built in or is there another way to count it as a br? Also i have a room that serves as my workout room but doesnt have hvac so i believe its sq ft has never bern counted. Would it make sense to run hvac to it so i can gain the additional sq ft? The room is about 8×12. I want to maximize my appraisal to get a larger line of credit. Thanks

Yes, I am also from Anderson.

Originally posted by @Heath Dunn:

Hey Daniel, I am from Anderson. Are you familiar with these areas?