All Forum Posts by: Donald Torrence

Adam I have used owner finance to buy a 11 unit 12 unit the 5 unit and 18 unit.. I'm looking to pull cash out to buy bigger buildings

Hey BP,

I have been trying to refinance a 5 unit building in Northwest Indiana. I have found that the banks in my area do not like 5 units because the loan won't be big enough. I have been searching for a broker to get the loan done to find out that they want 9 to 12% with a 3-year adjustable rate and a prepayment. 

What has been BP experience with getting loans done for a smaller commercial apartment building? Can anyone guild me to a lender?

HI BP,

I am in Northwest Indiana looking for a new accountant that knows all of the write-offs that an investor can take on their tax return without getting an audit. This accountant needs to know about tax strategies for apartment building investing.

Jeanette, thanks for your input on private lending. When I say 100 percent funding I mean single family and the investor must have experience and have a relationship with the lender. I buy apartment buildings 30 or more units. I use private lenders  for the closing costs.  I give them 6 to 10 percent on their money and  25 to 35 percent ownership of the deal. Each are a case by case. I will bring the loan in my name and refi to get them their cash out so there is no money in the deal after a year. I need to know that I can partner with that investor because  we will be connected at the hip until the deal is sold or the partner is bought out. 

My concern is for those new investors starting out who have not made the connection with lenders and are getting ripped off with the up front payments and never receive the funding. I have heard these lenders are on Craigslist and other social media sites. 

Question to all of the lenders out hear. How many lender have the experience to do a purchase refinance?  I had a lender that could held them but he has passed. I have yet to find a lender that know how to complete this kind of transaction.  I shouldn't have to explain the transaction to a lender they should know how. The lender I had would help me sell the deal to the seller and most of the lenders I've talk to will kill my deal. Will the lenders that understand purchase refinance please stand up and reach out to me.

Both hard money and private money terms will be based on your experience and relationship. They both have the ability to lend for both parties to make money. New investors are having a hard time with HML with their terms. I have worked with new investors trying to use HML and they have been getting slammed. 2 guys found private lenders and they have been more favorable.

That is so true, but do keep in mind that hard money lenders get their money from the private sector that is made up of individual who pull their money from a 401k or their savings account to give it to a hard money lender for them to invest for them.

Here is a problem that I am having with people who are saying they are private lenders. You will hear them say that it’s all hard money. They say this because of the interest rates. Little do these people who say they are private lenders know is there is a difference? You will see both are close to being the same but one is cheaper than the other. I have put together a list for you to know what the differences are between hard money and private lending. After looking at the list please tell me which lender you prefer to work with.

Now, will the real private lenders make yourself known so investors can reach out to you and not the people saying send some money and they will wire the funds into an account? All funds or fees should be at the closing table.

Private Lender                           Hard Money Lender

Look at your credit                                               Yes                                            Yes

Based on the property                                         Yes                                            Yes

Will loan 100% of purchase

and rehab                                                             Yes                                             No

Personal relationship                                           Yes                                             No

Interest rates from 6 to 8%                                 Yes                                             No

Loan terms from 6 to 12 mo.                               Yes                                            Yes

Flexible terms                                                       Yes                                            No

Will do joint venture deals                                   Yes                                             No

Can close fast                                                      Yes                                             Yes

Fees                                                                     May or May not                          Yes

Charge points                                                       No                                               Yes

REAL ESTATE INVESTORS YOU SHOULD ALWAYS BE LOOKING FOR FUNDING.

SHARE YOU THOUGHTS ON THIS MATTER.

Ramsey,

I set up deals like this for myself, here I do them. I set up a LLC with a partnership agreement and make the investor 20 percent owner of the LLC. Giving them a small part of the LLC the bank does not have a problem with the down payment being seasoned for the investor can send the lender his bank statements. I give the investor 20 to 25% of the deal and 6% on their money. You can give your investor what ever you agree upon. This way they are a partner not an investor. I have not had a problem doing this.

Hi BP,

I have a 5 unit in East Chicago Indiana, That I have rehabbed and is 100% occupied. I am looking for a lender to refinance the property for me. If you know of a good Broker please pass their information.