All Forum Posts by: Rob Beeman

@Luis Maza Just like there are quality contractors out there and those that are not, the same applies to wholesalers. The right wholesaler that knows how to properly calculate a SOW (scope of work) to gain the rehab budget, generate an ARV from local comps and not want to get rich on every deal is NOT easy to find....but, they do exist. When you find them they are like gold for your business.

My guess is that you consider many properties as options before deciding to buy one, and vetting wholesalers is similar (look at many, with hopes of finding one). Here are some reasons why the wholesaler pricing may not work:

They do not understand how to calculate the rehab or the ARV

They are NOT the party under agreement with the property owner and are part of a daisy chain with another wholesaler (or more than one). This is more common that you might think.

They do not take into consideration the costs borne by the investor associated with the transaction such as: closing costs, carrying costs, finance costs, exit costs, etc.

They are trying to hit a homerun on every deal and not leaving enough "meat on the bone" for the next person. 

When I was investing, this is what I did to help locate the right wholesaler - I would supply them VERY specific details of what WORKS for me in the way of a property. Example: I define what zip codes (or neighborhoods) that I buy in. I specify that it has to be at least 1000 square feet (SF) (bigger the better), it doesn't have to be a 3+BR, but if it's not and at least 1000 SF I can convert it to be a 3BR. It DOES NOT require a full gut rehab (rehab could consist of new kitchen, new bath(s), windows, flooring, paint, etc. (mostly cosmetics), what price range that it must fall into at that condition (for the purchase price) and/or what the maximum LTC to ARV must be (in other words the purchase & rehab numbers must not exceed 65-70% of the ARV, the lower the percentage of ARV the better). They understood that if it fits that buy box.....I buy it. If it doesn't, don't bother sending it to me.

When I found wholesalers that wanted to make money, they would locate properties that fit my buy box and we would do many deals together. I never cared what they are making as the assignment fee, as long as I knew the numbers worked on my end.

As for a purchase & rehab lender that will finance up to 100% of the wholesaler's assignment fee - I can introduce you to one that finances that and also 100% of the purchase & rehab up to 65-75% of the ARV.

As a lender I sometimes receive off-market properties from wholesalers and other sources and share them to our borrowers if they fit what they are seeking. I recently connected with a GA based wholesaler that seemed to supply what fit within one of our borrower's buy box. You might want to see if they can help you (just be specific on what your buying criteria (the buy box) is so they supply what makes sense (if they can locate it): James Fleming 706.463.9584. Wishing you luck, Rob.

@Jennifer Katherine De Loughy Sent you a message & connection request. A legit direct lender since 2009 that can help with 100% financing.

@Corey Crowley You can transfer the property to an LLC during the closing of the DSCR refi loan. The settlement agent conducting the closing will be able to share what options there are to accomplish this (quit claim, straight transfers, etc.). The loan will be originated to the LLC (entity) as the borrower and the property (being transferred to the LLC) will be the collateral.

You can choose to refi the properties individually or in a loan tape (portfolio), however when in a portfolio the properties need to all be owned by the same LLC, and the lender may require that they also be all in the same state. The benefit of using DSCR style loans is that they typically do not appear on personal credit reports (unless there is a default). The downside is that usually the rate is a little higher than a loan originated in your personal name as it is a non-residential style loan on a non-owner-occupied property (investment property loan).

@Adolphus Fletcher Like others have mentioned, gaining a non-recourse loan is a challenge unless in some cases where the loan is a commercial style loan of $5MM+ and the borrowing entity has strong income & assets to satisfy the lender's concern tied to the guarantee of the loan. However, if you choose lenders that originate the loan (purchase/rehab/DCSR) to the LLC (entity) and do NOT report to the credit bureaus then as long as you do not default on a loan, the odds are slim that your borrowing activity will appear on personal credit. Just make certain to pay as agreed and exit as planned.

Are you a mortgage broker that services real estate investors? Do you enjoy closing loans? Are you ready to work with a direct lender that loves partnering with brokers and lives to close loans for real estate investors? If your answers were YES.....then you have found the right lender to partner with! We are Rehab Financial Group (RFG), a direct lender to real estate investors in these states: AL, CT, DE, FL, GA, IN, KY, MA, MD, MO, NC, NJ, OH, PA, SC, TN, TX, VA. We supply short-term lending on 1-10 unit properties consisting of purchase & rehab funds. Here is what makes us a little unique:

We lend 100% of the purchase and 100% of the rehab amounts (even to newbies)(NO EXPERIENCE NEEDED) on 1-4 units up to 65-75% of the ARV!!!! Yes, even a newbie can get 100% financing!

We lend 90%LTC (Loan-to-Cost)(Cost = lot purchase + construction budget) on ground-up construction of 1-4 units up to 70% of ARV (NO EXPERIENCE NEEDED)(we bring 90%, the borrower brings 10%).

We lend 85% of purchase & 100% of rehab on 5-10 units up to 65% of ARV for experienced multifamily borrowers.

No tax returns needed on our loans. Loans supplied to the borrower's LLC & do not appear on personal credit. Our loans include mixed-use properties. We live to close loans - if we aren't closing, we aren't growing! If you think like we do.......closing is surviving, and enjoy helping real estate investors start or grow their business using our capital, then let's talk.

Contact info:

Rob Beeman

Rehab Financial Group

Email: [email protected]

Direct: 215-913-1580 (I am old-school..... I answer the phone)

Curious if 100% Purchase & Rehab financing really exists (or just a myth)?

Here is how 100% financing works for the purchase & rehab of 1-4 unit properties:

EXAMPLE:

• Purchase $160,000
• Rehab $50,000
• ARV $300,000
• Loan amount $210,000 (100% of the purchase & rehab as it is lower than 70%-75% of the ARV)
• Lender origination $6300
• Lender fees for processing/wire/underwriting/ doc prep $2544
• Estimated per diem interest at closing $1115
• Rough cash to close from borrower of the fees listed is $9959 (plus local closing costs)

Total proof of liquidity from borrower to cover cash to close & reserves to start the rehab on this one is $25,000. This shows the borrower exposing less than $10K on a project that has a cost of $210K ($160K purchase + $50K rehab). That is called leveraging your cash!

Yes, 100% of Purchase & Rehab DOES EXIST. Need it?  To get the quote of your numbers/project, email: [email protected]. Prefer talking vs emails, no worries. Direct: 215-913-1580.

When I was flipping I noticed that the attraction was broken out in two categories:

The woman wanted to see improvements in the kitchen, baths & closets

The man wanted to see that it had a nice basement, garage & yard

The woman's desires seemed to add greater value than those on the man's list....and the woman's list always took precedence if the budget couldn't handle all of them.

Most of my borrowers tell me that their biggest challenge is locating the deals that make sense on numbers/profits. They have to source off market product to make money and that requires time and expense.....but ultimately is worth it, depending on how many deals they hope to do annually. It seems that the cost of the money isn't that great of a concern if the numbers are making sense on the deal.

We are a direct lender (Rehab Financial Group, also known as RFG) that lends 100% of the purchase and 100% of the rehab up to 75% of the ARV on 1-4 unit properties (including mixed-use) in 18 states (even newbies can get 100% financing from us). 

We gain many borrowers from referral sources (partners). Some of those sources are mortgage brokers, while others are businesses that network with real estate investors (settlement agents, title companies, realtors, wholesalers, contractors, etc.). The referral source is paid their fee on the loan closing HUD. We are able to close quickly and respect repeat borrowers from the referral source (paid on borrowers that come back for more funding). We also lend 85% of the purchase & 100% of the rehab up to 65% of the ARV on 5-10 unit properties.  

If you network with real estate investors that seek capital to start or grow their business & are seeking additional income, then let's connect and make it a win/win relationship for all parties - my contact info - Email: [email protected] Direct: 215-913-1580, Rob.

I am an old head in the game and started before many forms of private or hard money lending existed. I stumbled across private lending and was amazed at what borrowing money did for my investing (the supply of leverage). Not just more cash to do more deals, but cash to do better deals in different neighborhoods. I even was able to attract better contractors once the projects were in nicer neighborhoods - all thanks to other people's money.

I guess I never looked at the cost of the money (fees/interest) as a negative, since I realized that in order to experience growth, capital would be necessary. I factored the cost of that capital into my calculations from the start (working the numbers backwards from the ARV to the purchase price)(this also encouraged me to buy the properties at a lower cost).

I will say that the borrower has a better chance to negotiate on the fees, interest and when they are to be paid with a private individual lender as opposed to a hard money style lender (that has more overhead). I typically didn't negotiate the interest rate or points (as they would invest it elsewhere for more), but did negotiate the way it was to be paid (at the sale or refi, as opposed to upfront or monthly).