All Forum Posts by: George Randall

As a private lender, I always ask for a current PFS. I don’t care about seeing a PFS history. I’m primarily evaluating the deal I’m lending on, but I also want to see what kind of track record the borrower has in managing their financial obligations. Current PFS and credit check usually tell me all I need to know. 

What a great question! I'm following this.

I've done gap lending with a 2nd position lien. I protect my interest with a minority equity position in the entity that holds the property and a clause in the operating agreement that gives me majority ownership in case of a default.

Hey Dax. I live in Hixson and actually did a house on Meadowood. Send me a message and let's meet up.

The group you call "hard money" lenders, I've more often heard characterized as "institutional" lenders. I've always thought of hard money more in terms of the qualification of the borrower (asset value vs. personal credit). I don't think I've ever thought of it in terms of source of funds, but perhaps your point is this is where the industry has morphed to today. But I definitely think you're right in that there is not a clear distinction in terminology between private lenders, who are using their own, or a small pool of associates', money (often self-directed retirement funds) and institutional lenders. Thanks for taking a stab at defining these!

A straight-up loan will usually get you the best return on your investment. I say usually, because if you're inexperienced, it's possible that an equity partner could bring their expertise to the deal and earn you more, even after their cut, than you could earn on your own. 

Sometimes, if you're cash-strapped, an equity partner can help you save a deal you might otherwise have to pass on by providing down payment or other necessary funds that your lender won't provide. You would be more likely to entice a private lender to provide these funds by offering an equity share. Remember the old adage, "would you rather have 50% of something or 100% of nothing?"!!

@Mike Klarman has a very good point. If you're at 70% utilization, then your cc limit must be about 35k. Assuming $2500 rent less 30% costs, gives you $1750 per month toward your cc debt. In 13 months, you'll be below 10% utilization. which should get your score back into the excellent range, without any extra out of pocket.

But, you should make the determination for yourself if it's worth the cost to get it done faster based on your goals. Send me a PM if you'd like me to help.

How much are you wanting to borrow against the property? 

You say re-purchase so I'm assuming this home has not been inherited. But if it has been, Freddie Mac does not have seasoning on cash-out refi if the home is inherited...

Cash-out Refinance - Freddie Mac Single-Family

Hello Clay and welcome to investing! I invest in Chattanooga and also provide private money lending. Would love to catch up with you and talk about your goals. There is a BP meetup this Thursday at Goodfellas Pizza in Chattanooga. I would encourage you to attend if you're able.