All Forum Posts by: David Malik

I know of hard money lenders that stopped lending overnight, some who totally went out of business (commercial), and others who lent through COVID. On the working capital side I had my fave non-bank SBA lender to change underwriting reqs. They still haven't returned to pre-COVID underwriting. My bank lender didn't change underwriting reqs as far as I could tell though. However, they are pretty much non-depository. 

It is mostly non bank financing. However, it is not to say that some banks are not investing as part of their portfolio of investments, if allowed, in hedge funds/private equity. Of course, EVERYONE wants a better rate than what the banks are offering in yields, even the banks. LOL. Insurance companies, pension funds etc. are always looking to beat the market as well.

Furthermore, lets be clear, there are upsides and downsides to EVERY investment and loan, even a 1% loan at times from your bank. I have seen those downsides in working capital when a business wants to grow and the bank isn't interested in loosening covenants. I am not speaking of personal loans here.

Those who look at hard money as only a cost AND NOT a benefit are just as wrong as those who look at a 1% loan only as a benefit and not a "cost."

Good luck!

Really, it is funny to me. Folks say that it is best not to borrow until they run out of cash and have to. SMH. Whereas if they planned better they could use the cash as leverage to borrow but now they don't have that option.

Guess What?

We like for you to have some cash to put in the deal. You don't, we don't. This is from a man who works with high-risk lenders. Skin in the game is important to us with most financial instruments we represent. The ones that don't have even higher cost of capital levels. 

I'm a working cap guy who is extending his offers into RE lending. Believe me, none of the lenders I worked with or work with want to lose their money, even if it means they may own your personal residence let alone an ABL investment. I have had plenty to come to me too late for me to help them.

Or they think borrowing from family and friends has no downside. Are you kidding me? Thanksgiving has enough problems without the side-eye from someone at the table you owe money.

For most of my lenders, you are inexperienced until you do three in three yrs. It means you will not get the best rates. In addition, the reqs for multi usually have a higher min before they would fund. They go by a per unit amount and the price depends on whether it is 4 & below units or 5+. 

The only way this makes even a little sense is if he/she is an individual lender and not a company. Even in that case, if this is someone that you have just met then no. So none of my HML partners would do this. Why would any legitimate company put there money at risk like this? Let me guess, they are offering really great rates.

Once they have access to your bank account, the money can flow in and out. Be careful.

If all of this is liquid, why don't you find out whether you even like real estate by flipping a couple of houses. Why not take ten, twenty, or thirty percent of it find a market that will work for that amount and see? BTW, I have heard that the best time to talk to lenders (me) is when you don't need our money. Believe it or not although I am a lender, actually broker for a few, I will likely never get into flipping or rental. 

I love the numbers side of it as I was a Econ-Finance major in college but RE doesn't get my blood boiling: Numbers, winning & closing does. Winning in this business for me is making sure that all three sides are thriving: me, borrower, & lender.  BTW, I am pretty much a newbie in this biz as well. My experience is in working capital from SBA loans to more exotic stuff. COVID has caused me to make sure that my portfolio going forward is a bit more diverse. 

LOL! 

I will add here as I have spoken wayyy too long & have had wayyy to much fun is that I have no idea how secure AOL is and that it would be good to do some research on it as well. Sorry, but I don't think I would want to send important docs even with the https designation. Probably fine to do so, but no. Other than that, I started my email with Hotmail. I just tried to go to that site and it goes straight, transfers, to Outlook. I happen to have an Outlook account as well along with Yahoo, Gmail & mail.com.

Within a week would be a challenge for us (Tier I HM lender) especially with what is currently happening in the appraisal industry. Normally, it takes us 2-3 wks  to get it done but we may have other options.

One of my vetting tests is how long it takes a biz to return a call. Frankly, this is an important test. I have a motto, "If I don't return your call in 24 hours, I am dead. If I don't return it in 48 hours they have already had the funeral. We try to return our calls within 2-4 hours." Even though I try to return a call in that four hour window, I am fine with someone calling me the next day.

They could call you to tell you when they could actually speak to you EVEN if it is after normal business hours or even tell you that they just can't help you at this time because they are swamped, if they are interested. If they are that successful, they could hire a personal assistant to assist in returning calls.

Sometimes organizing, takes organizing overtime.

Congrats AND keep grinding until the income grinds 4U!