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All Forum Posts by: H. Jack Miller

H. Jack Miller has started 20 posts and replied 229 times.

Post: Hard Money vs Private Money?

H. Jack MillerPosted
  • Lender
  • Boca Raton, FL
  • Posts 249
  • Votes 133
Quote from @Will Barnard:
Quote from @H. Jack Miller:

Its the same thing, some call it private lending some call it hard money lending, the names change every few years, it used to be sub prime and before that non conforming lending. Bottom line its the same thing what ever you call it, 


 This is just blatantly wrong. Private money and hard money are not the same and neither used to be called "sub prime". A sub prime lender is one that lends to borrowers with low credit scores who often are high risk to not perform. Certainly a private or hard money lender could lend to a low credit score borrower as some look at the collateral rather than the credit, none the less, your definitions are wrong.


 Please explain the difference then to me between them all? 

Post: Needing some expert advice please!

H. Jack MillerPosted
  • Lender
  • Boca Raton, FL
  • Posts 249
  • Votes 133

Its impossible  to precede 5 years from now, most investors have only lived thought a decreasing rate environment. I would do what I call is a shock test and try to see what debt the property supports at different interest rates. Example is rates are 300 BP higher will the property support it?

Factor in as a guess what rents and other expenses will be as well

Once you do the math you will have a road map. 

I believe the Fed is talking about more .50 BP rate increase in the near future,

You should make sure you can afford to pay the fully indexed rate, as well I would make sure if there are DSCR convents in the loan documents or any other covenants to make sure they cant put you in a technical default. While now its not a big thing but in the last crisis of 09-11 this is a giant issue

I am guessing something is off here. Usually banks have a 12 month or some period of time of seasoning, But I have never heard of 5 years, you want to clarity with them

Post: Please advise on mixed use

H. Jack MillerPosted
  • Lender
  • Boca Raton, FL
  • Posts 249
  • Votes 133

Its really not that hard or complicated, just get to know the rent comps and market example gross lease v NN lease.   

Its impossible to predict what rates will be at any given time. My advise would be to prepare for not refinance it and if you do that's great 

Post: Deal Crunch (Help Wanted)

H. Jack MillerPosted
  • Lender
  • Boca Raton, FL
  • Posts 249
  • Votes 133

I think the numbers your using are very low. In the real world for this type of product a 3% vacant is almost impossible over a period of time. Some tenants don't pay and it takes months to get them out, sometimes there is a turn over time and then you have the unexcepted events like Covid. I would use 15% vacancy. 3% cap ex and Maintaince again is VERY low. I would figure 5k annually,  what every your using for taxed and insurance I would raise it. Insurance is going up and so is taxes. Cap rates are hard on properties like this, but I think your is very low.

I feel bad, saying all this, but real world can be much different then text book. I also would keep a lot of cash reserves, that's your best protection.

Post: New to BP and Commercial Investing (NNN)

H. Jack MillerPosted
  • Lender
  • Boca Raton, FL
  • Posts 249
  • Votes 133

They are a great real estate class for some, You have to know what your getting and doing as well have your goals inline with the deals. 

Not all NNN deals are the same and people sometimes confuse a NNN deal with a credit tenant deals.

I have experience in both if you can lay out your goals I can highlight the differences. But I would start looking around for them and see how they pencil out. 

Jack

Post: Financing for a 6plex

H. Jack MillerPosted
  • Lender
  • Boca Raton, FL
  • Posts 249
  • Votes 133

If clean deal maybe a local bank, if not there are plenty of non bank lenders who I assume would do it from what i am reading. 

Quote from @David Malik:

I know of hard money lenders that stopped lending overnight, some who totally went out of business (commercial), and others who lent through COVID. On the working capital side I had my fave non-bank SBA lender to change underwriting reqs. They still haven't returned to pre-COVID underwriting. My bank lender didn't change underwriting reqs as far as I could tell though. However, they are pretty much non-depository. 


 I hear this all of the time. I am not Self promoting by Gelt Financial has been steady since 1989, and busy during Covid and still lending.