All Forum Posts by: Dominic Richardson

Dominic,

Auctions can be pretty tricky here. So I would argue that it has less to do with knowing the lender's requirements (bring on a broker or flexible group) and more to do with what the auction company requires. 

From my experience, the biggest factor is how the auction company works. It is very regional and differs by group, but some would say that you can't have interior access but you can have 30 days to close (quite a few lenders can do this), while others would allow interior access but you only have a week or less to have the funds (or same day in some instances). 

I would get to know the auction company first and what they will allow, and then work with either a couple of programs that would work or use a broker. 

The other option (if you have the capital) is to utilize an 'Unseasoned Refinance' or a 'Delayed Purchase' to essentially purchase in cash and then recoup those funds with a second closing. You won't get the full seasoned-ARV, but you can free up some capital after you purchase it and utilize a rehab-escrow to do the work. Not every lender does it, but it give you the bargaining power of cash while still maintaining some liquidity.

Good luck, happy to help where I can!

Hi Dominic, 

You may want to look into a local hard money lender that does not require interior access to the property. However, if you are planning to have the rehab funds financed, you will most certainly need to provide the lender with a detailed scope of work. 

You could do a rehab loan after closing on the property, however these are much more challenging to finance than a traditional fix and flip loan since the leverage is reduced on a refinance compared to a purchase loan. 

I would suggest looking into buying these with a HELOC or raising capital.

@Dominic Richardson Per the other input, I think we need more info. 

First and foremost, are you talking about private debt? Or private equity financing? That will change the answers a lot. And as @Robin Simon, stated what type of deal is this? 

Generally speaking in partnerships, and in all investments, people are looking for the best risk-adjusted returns. So if you're buying a stabilized cash flowing asset, the returns you'd have to offer a PML would be lower. If you're doing a risky flip, the return requirements will be higher. 

Probably need more information, especially regarding type of real estate investment because its going to definitely differ dramatically, some thoughts:

-If its for a rehab "Fix and flip" - definitely more about value, experience, timeline

-You are mentioning more about rental property metrics - if so, is this SFR or small residential or commercial? Cap Rates really don't apply to residential so drivers are going to be much more about credit and value - if commercial, its a whole different thing - more about cap rate cash flow metrics etc

If you are a PML or Money Partner, what do you look for when someone brings you a "deal"?

Is it Cash Flow, Cap Rate, COC, all three or something else?

If it's cash flow, what is the target amount? 

If its COC return, what is the target?

I understand everyone looks for something different in a deal. But I want to set some parameters when I analysis a property based on  your feedback, so when I find a deal its more appealing when I present it to a PML or Money Partner. 

Thanks in advance!