All Forum Posts by: Dave DeMarinis

@Mike Hartzog @Samuel Bell Of course they are many definitions for Private Money vs. Hard Money, but to me - Private Money means the loan is primarily based on the relationship between borrower and lender. The lender is likely not a professional lender and the borrower should absolutely be thinking about protecting the lender.

For a Hard Money Lender, they will worry about protecting themselves which also provides a number of safeguards for the borrower because that is their job and profession. 

I'm very happy with my SFH activities in Huntsville. In MultiFamily, I agree with your assessment. I haven't liked any deals I've seen unfortunately.

@Daniel Mendez I don't think there is a stay away zip code in Huntsville. There are stay away streets/blocks/homes and probably in nearly every zip code but there are no "Area 51" zip codes. To Caleb's point though, it really depends on your strategy and goals.

How long has the property been on market? To offer $33K for a $60K listing, you should have some REALLY strong backup to justify why $33K is the market and provide it in writing to them. If you have a renovation estimate and comps to back you up, that is a good start.

It doesn't make a lot of sense for a buyers agent to spend their time on this because even it was accepted with ease, it is a $1K commission (before broker split) ... 

@Steven Andrews If you want to do a no money out of pocket deal, bring in a partner to supply the money. Some lenders will do this for clients who have borrowed a number of times from them. 

I'm not sure what you mean when you say they want you to have almost as much as you need. In your example, are you saying they want you to come up with almost $120K?

Where are you located? You should be able to get up to 90% of purchase, 100% of renovation up to 70% of ARV. Small variations but those are good rules of thumb. However, you will need in that case 10% of purchase, closing costs, 1 year of insurance, 6 to 9 months of interest AND enough to float 1 construction draw. Think of construction draw as reimbursement. Once work is completed and you pay, the lender will reimburse you. In a $20K renovation, that is probably about $7K per draw.

@Cody Davis Where are you missing the VA parameters in Dayton? Are you wanting a builder to do a spec home for you basically (he finances it) and then sells it to you on a VA loan. That is creative because a normal construction loan will be pretty high interest and require a significant out of pocket. If you could put together a deal with a builder, you'd have to pay a premium to make it worth their while to tie up their capital and balance sheet. Even then, I think the builder would be slow to do it without a fairly sizable up front financial commitment from you so you can't back out.

Interesting puzzle. If you could find a way to source the land well below market so you had some equity at purchase of land, that would help. However, that is more a strategy for a high land cost market. (not Dayton)

@Asa Ifill you are smart to get loss of rent. Also, make sure your coverage A is sufficient to rebuild the property if you have a total loss. I generally prefer very high deductibles with really strong coverage. I will "self insure" on the small stuff (hence the high deductible) but if something catastrophic happens, I don't want to be worrying about the economics as well as the rest of the mess. I'll DM you but Clinton Orr at Nationwide has been a great resource and does all my properties in Huntsville. Let him know I referred you, I really like him.

@Peter McDonough Have you experienced a problem with loss of rents? It is pretty straightforward in my experience? Not everyone offers it but if it is in the policy, it shouldn't be a problem to claim it.

One effective way to deal with people who threaten to "see you in court" is to explain that you generally go above and beyond based on your own philosophy. The law provides a bare minimum requirement and you often choose to go beyond that because you think it is a better solution. If she would prefer you only provide the bare minimum as required by law, that is another approach. I'm not sure if this is a good approach in this case but it tends to help enlighten people. 

@Douglas Vogel Did you end up purchasing any multifamily in Huntsville? I'm still a cynic given the SFH rent levels, which I see as a ceiling on multifamily however the rent appreciation of the last two years is getting close to opening the door in my mind. Hopefully you found a niche where my cynicism left an opening.

@Kiley N. where is your 12 and how is that going? Also hoping you are exploiting a niche!

@James Ahern are you looking for long term financing or short term acquisition and renovation? Also, approximate value of property and loan?