All Forum Posts by: Eric Roloson

@John Thedford

Thank you for sharing. Great picture of creative financing! I get excited about people like you who find great opportunities and then reach out putting in the effort to find funding, that in turn generates substantial profit! 

NEWS FLASH: Private money lenders do exist that are not friends and family :)

You got a beautiful house with a ton on equity, while benefiting the seller and the lender. I also like how you developed a unique strategy that worked for everyone with leasing to the seller for a year, and the optional memorandum do give yourself options if the need arises. Congrats!!

@John Thedford 

that's fantastic! Would you mind sharing your ad? Also, since it is a buy and hold what is your strategy since these loans are short term. Usually between 3 months to 13 months. Refinance? With who and how?

@Jay Hinrichs looking back it does look  a bit like an advertisement, LOL. I reached out to many hmls. All of them had guidelines they set. To shed some light on the subject, I got a loan for 70k as half of the loan is for rehab. 

There were a couple of them who would not that lend that portion but only for acquisition. Another would not lend anything under 100k, which is understandable. They want to make money too. However, I just made a lot of calls and sifted through the details. In fact, one "fast talking" HML kept changing and mixing terms, I had trouble getting the actual numbers! Red flags! When I did get enough of the numbers, like pulling teeth, the fees were exorbitant! I simply called another and compared.

@John Thedford  I would agree I might get scammers and frauds asking for that kind of money on CL. You would think that might attract some sketchy people on such a platform, don't know if I could bear doing that. Contacting directly, checking reviews, and speaking to originators usually vets the good from the bad. Thank you all for commenting, keep it up! I'm new to BiggerPockets and want to keep learning, growing, and investing

A hard money lender is the way to go in my case. I put addendum in the purchase agreement that it would be contingent on me getting the financing. The selller was ok with this. Rather than wait for HELOC and run out of time with documentation and slow paper pushing through numerous people and underwriters, I found a hard money lender.

I recommend if anyone go this route, shop around. They all structure their loans differently, and will fund in different ways. I found some are very legitimate and offer a good product with clear terms. Make sure you understand exactly what the origination costs are, other (junk) fees, prepayment penalties, length of loan, extension fees, draws if they are funding rehab, etc. Also, i would suggest finding one locally that is familiar with the area that you can meet face to face and build a relationship with. If you have solid exit strategies in place and figure your cost of the loan into your potential profits you should do well. My margins are excellent. Yes, the rates are quite a bit higher than traditional banks. But now I have the ability to not only acquire the property through funding but also get the 100% funding to rehab it! I either use a hard money lender and make significant profit after all costs (including hard money loan) or no profit at all. Keep in mind, I don't have a rich uncle or friends I can borrow from. The key is be prudent and have a strategy! I have a choice, I can either lock in a deal with a hard money lender or not get the property. I know what I would do, what would you do? :)

A hard money lender is the way to go in my case. I put addendum in the sale agreement that it would be contingent on financing. The selller was ok with this. Rather than wait for HELOC and run out of time with documentation and slow paper pushing through numerous people and underwriters, I found a hard money lender.

I recommend if anyone go this route, shop around. They all structure their loans differently, and will fund in different ways. I found some are very legitimate and offer a good product with clear terms. Make sure you understand exactly what the origination costs are, other (junk) fees, prepayment penalties, length of loan, extension fees, draws if they are funding rehab, etc. Also, i would suggest finding one locally that is familiar with the area that you can meet face to face and build a relationship with. If you have solid exit strategies in place and figure your cost of the loan into your potential profits you should do well. My margins are excellent. Yes, the rates are quite a bit higher than traditional banks. But now I have the ability to not only acquire the property through funding but also get the 100% funding to rehab it! I either use a hard money lender and make significant profit after all costs (including hard money loan) or no profit at all. I know what I would do, what would you do?

Private money would be the safest and simplest way to go, and I am searching. If I apply for a unsecured loan from a small bank won't that cause my HELOC to be delayed or even not be approved because they will see activity that makes them nervous?

I just joined biggerpockets and am excited to post my first question. 

I have found a great property to rehab and flip. I am confident I can get an amazing deal on it. However, I have a problem...TIME! 

I have 10K in the bank ready to use and around 50K of equity in my own home. I only need 35K. The bank will take 4-6 weeks to approve my HELOC and the I feel if I wait that long I will lose this opportunity. What should I do?