All Forum Posts by: David Dey

@Toyin Dawodu you have raised quite a number of good points as have the actual lenders here on this thread.  Both sides are right on many levels.  

Having raised millions of dollars, and having done over 1000 deals with only using one bank loan, the rest being private money, hard money, and creative financing, and not only having borrowed but also lent, I think I am qualified to speak to all points.  

Toyin, your not gonna like this but it's a fact, there will always be more good deals than money.  That is why the investors golden rule exists.  You know the one, "the guy with the gold, makes the rules."

The good news is that if you follow a few simple rules and you actually have good deals, you won't have any problem getting your deals funded.

Here's the truth in lending, (pun intended) there are two questions every lender asks in making an investment decision. It doesn't matter if it's a bank asking for your 10-03 and tax returns or a Private lender asking if you have skin in the game.  It doesn't matter how they ask it, it always boils down to 2 questions.  And the good news is, if you answer these questions right, to your lenders satisfaction, you will get your deals funded 100% of the time.  And if you've ever been rejected for a loan, look at these two questions, if you're being honest you will see that you missed them somewhere.

Are you ready for the questions?  (I bet even the lenders are anxious to find out what these magical questions are)

Here they are!!

Question 1)  what's my security?  Or another way of asking it, how am I not going to lose my money?

Again, Bank of America asking for your credit score, tax returns and your 3 months of bank statements is really only asking you one thing, "how are you going to pay me back?"  Or "what's my security?"

Have no fear, the bank wants to lend you their money, they advertise and market and practically beg you to borrow from them.  They just ask this one little question.... In sooooo many words.

And take it one step further, if you do borrow from them and then default on your loan, will the bank take it personally? No.  They probably don't even remember your name.  Yes they will take your collateral and will report to the credit bureau.  They may even put a judgement against you, but it's just business, it's nothing personal.

A private lender on the other hand, has saved his money over years.  He's has worked on his job or business, and set aside this money as a nest egg for he and his family.  His family's legacy may very well be on the line in his loan process as this could be their inheritance.  Now, with all that on the line, if they lend you the money and you default, do you think it'll be personal to them?  You better believe it!!!

So, seeing how important their lending process is to them, you can see how important answering question number one TO THEIR SATISFACTION, is going to be, right?

If you have made it past the first question, the second will be a breeze.  However, don't take it for granted.  It is still very important to your lender.

The second question is, "What's my return?"  

Ta-Dahh!!  Those are the 2 questions every lender asks.  

Now I'm going stop the soap box speech for a second and give a pop quiz.  @Toyin Dawodu since you have over 400 deals under your belt you will probably ace this, but humor me.  

Mr money bags is standing in front of you, you've presented your deal, and now he's asked you question number one, "what's my security?"

What is your answer?  (I'm not being rhetorical, please answer the question.  And anyone else on this thread @Charlie Fitzgerald @Al Wilson @John C S. @Mike Arias @Rod Desinord @Account Closed )

I'll weigh in after you give it your shot.  I bet you borrowers will be surprised by what the lenders here will say.

 You are absolutely right as to the fact that Lakeland code does show favoritism in a good old boy network.  @Kimberly Jones is also right it helps to know someone.  At the time of this deal I used to handle my own codes, now I hired someone that I call the code whisperer who handles all my negotiations.  

The rule of thumb for Lakeland code is reducing the lien to 10% of the total amount along with admin costs for first time offences and 50% for repeat offenders. The problem with this one is that they have suspended the ability to pull permits which would put a hold on demo, and you know them in Lakeland, they once they get something set in their brain they don't like to let go.  It's like you have to have a big stick to threatens them with or a "code whisperer," to deliver the carrot.

@Kimberly Jones again, just like last time.  I kind of like your idea better then mine.  I don't see much fault in your plan at all.  The only thing (and this I think goes from city to city) is that Lakeland generally requires the work done before negotiation. But, who knows, maybe they make an exception.

Also, that is a good point, that as lender you have the right to protect your interest.  So remediation is possible.  Again, the only wild card is whether code would work with you.

The only laugh is because we remember when we'd been in your shoes.  :)

 And at least had the decency to hide it under the deck and not in the house.  :)

 Love it,  I'm not sure how strong your stance would be as just someone in contract, but as owner that would work.

 First, let me apologize for not inviting you.  I've seen your posts throughout these threads and absolutely thought of you as one of the ones I wanted to weigh in on this.  (Blame it on temporary insanity or something of the sort)

You will most definitely be invited from here on out!!  (Though I would guess you probably have a number of those super duper grand Poobah awards on your mantle already)

Second, everything you said absolutely is true about an eminent domain about fair compensation and the priority of liens.  

The problem with waiting is the demo.  Like you said, The valuation is based on liquidation valuation and if the property is just a city lot.  Land value is around 15-25k total.  Your right municipalities won't "tax" each other, but they will "tax" you if given the chance.  

No doubt you are a grand Poobah though and will have this solved.  :)

 See this is why I made the shout out to you, I knew that guys like you will have some thoughts like this....

Here are the things that need to still be addressed though.  

1) the fact that the foreclosure just started in the middle of the active chapter 13 says (and was later confirmed by owner) that the property has been released by both the owner and the trustee as worthless to the bankruptcy estate.  So no wolves held back.

2)  if you were to buy the note, would you continue the foreclosure, which would take months.  (Keep in mind, demo takes place in 30-60 days) or would you just sit back and take your chances?  

3) one more thing to keep in mind, the DOT is over a year away and not a sure thing until they actually start buying or pursuing eminent domain.

 Man, I love how you think!!  No I didn't hire an Atty personally, but how would you incorporate Erin?

(Remember, I don't want you to figure out how I did it, I want you to tell me how you would do it)