All Forum Posts by: H. Jack Miller

Have done over $15,000,000 in originations in the past 9 months and likely originating an additional $5,000,000 before end of year. This is what I'm seeing in the market: Leaning on existing lender relationships is generally the path towards originations these days. New relationship bank CRE borrowing is especially challenging. Balance sheet and depository relationships (some banks requiring upwards 10% of loan amount) are being prioritized over merits of the deal/collateral. Fewer banks willing to give credit for imputed equity even if generated through heavy lift entitlements. LTC/LTV also lower which combined with depository relationship makes borrowing even more capital intensive. Banks are less willing to budge on pre payment penalties knowing rates will likely ease and don't want to lose loans recently originated to better terms.

Until Fed begins to cut rates I’ve found alternative lenders in some cases to be competitive with banks on construction debt when considering the totality of factors (rate, leverage, depository relationships and pre- payment penalties). Especially for projects expected to be stabilized within a year that are refinance candidates. Still important to vet these alternative  lenders well. Many are adjusting their draw funding guidelines on the fly. I suspect because some are struggling with liquidity since  they are holding loans longer than anticipated because their borrowers are having difficulty refinancing off their books.  Federal along with state chartered credit  unions that are not permitted to charge prepayment penalties are also competitive right now on rate and more and more are building out construction platforms, although very conservative on construction originations. 

Are you asking if there is demand for software? I believe so. There are software platforms available now.

In the hard money world this gets brought up a lot. I love the guidance of telling others here they need to be well funded. A lot of new investors are hearing a lot of zero down, subject too, and silent second positions. They can be all dangerous and some often carry legal risk. Listen to the people who tell you to have ample liquidity. Subject too you can get in low cost or free but the risks associated come with the need for money, silent seconds can ruin your personal life and make refinances possibly impossible or can sink the investment throughout or after liquidation. Nothing is free in real estate. Even if you use an outside PML, silent seconds and business credit to "show" liquidity to close. The rates and stipulations attached can most definitely ruin however far you get on those means. Liquidity is equity, equity gives you protection from any lien holder whether seller, bank, HML, or PML. Don't fall for the getting into it free plan. Save up some money and buy within your means of projected risks. Understand the contracts you sign and how each detail of the investment can be effected in each scenario. Happy hunting gents and ladies.

Well, okay, since much has been written about subject to in the forums (and an awful lot of bad advice) here's some facts
1. Don't ever do subject to if you are underfunded
2. Don't walk across broken glass in your bare feet, it's like buying subject to and being under funded.
3. The lender can call the note due and you have 30 days to pay off the loan in full or send your seller into foreclosure.
4. Is there a place for subject to, sure, but it's for well funded advanced investing
5. Do we know how to do subject to without getting you into trouble, sure. But, it's like buying using subject to, you must be well funded.
6. Do I use subject to, yes, I made my first million using subject to, buying pre-forclosures. Is it risky, yes. It requires being well funded and knowing what you are doing.

Hello Jack, in Texas I find a lot of investors using the Subject 2 method, especially with FHA properties where they are at or under water on their mortgage, but most of the mortgage rates are under 4%.