All Forum Posts by: Iman Yu

@Jacob Sampsonyou brought a very critical point here and I am sure this is why many people turned away from using hard money on a BRRR deal. What are the pointers to make sure you can get your rehab project refi-ed, after you completed your rehab and got it rented out?

If you don't get it re-fi in time, what are the exit strategies? put it on the market? find private lenders?

@Brit Foshee Congrats! Looks like you have done a fantastic flip deal recently!  how is the negotiation going?

So it looks like you got this deal through a wholesaler who negotiated a deal from the bank directly? So this was a foreclosure/bank owned property?

did you use hard money on this deal because this house wasn't in a condition to qualify for a 30 year note or was it because you needed to close very quickly or was it because you needed to borrow money for the rehab? 

I would like to know why you chose hard money on this deal.

@Joe Villeneuve thank you for making that important clarification. What you said makes 100% sense to me. Hard money is a cost that needs to be covered by the spread. Otherwise, the deal isn't good enough to use hard money loans.

Thanks for the insight!

@Brit Foshee

Thanks for your response. 

do you mind explaining a little bit more in detail in what you mean by a deal with a larger spread? What calculations are you using to calculate the spread and what qualifies a large spread?

Thank you for walking me through the 2) on the financing side. That's all very good points. The process itself does have enough elements where if a newbie isn't careful about checking out these details ahead of time, they would end up losing some money.

What about on the deal itself? Do you mind talking about what deals make it a good deal to use hard money to finance?

@Gary Ytreeideso I think going with what you are saying you would use it to finance a BRRR (Buy, Rehab, Rent, Repeat) deal?

Say if it's a deal for a SFH @ purchase price 50k, repair is estimated to be 22k and ARV is 100K. Is that a deal for hard money loan or no?

@Jacob Sampson what about for BRRR (Buy, Rehab, Rent, Repeat)? What's the strategy on using hard money to BRRR?

So I've watched a pretty good presentation on 'hard money' from Rich Club's webinar archive. 

Cal Beran hosted the session and he is from "Longhorn III Investment.'

His examples were clear and his step by step process make sense, too. However, as any newbie would want to know is the 'how's'?

How do you know when it's time to use 'hard money' as an option? 

In other words, I know hard money is a tool that can work for a REI investor and I am sure it's not meant for every deal or every investor out there.

I would like to get a feedback on:

1) what kind of deals makes it a good deal to use hard money for? 

-The criteria to spot such deals should be different than a deal that one would use conventional financing for but what are they?

2) What kind of check list should an investor have when looking at a hard money deal?

-Since the risks are higher in this kind of financing, I am sure it would come with some common pitfalls such as under-estimating repair costs, not knowing the market well, not knowing how to to calculate ARV?

Thanks!

Iman

@Jacob Sampson haha well I must say then...it takes 1 to know 1 :-D

@James Paine that's a very aggressive goal. If you have any general strategy that you think is effective, please do share!

@Jacob Sampson maybe you will find this surprising but what you said is what I believe in as well. I admit that I wasn't always like this, but after reading a bunch of things on REI and checking out a bunch of clubs/mentors, I've changed.

When people asked me about my strategy, I also start off with a similar tone 'my strategy is boring and I like my boring investments. are you sure you still want to hear it?'

I like boring investment strategies. I believe a life well lived should be a life which you remember plenty of exciting moments, but I don't think that necessary has to come from your investments. 

I like boring and sound strategy in REI because I too believe that positive growth over time is what I am looking for as a goal as well.

Thanks for sharing your honest insight on this. I appreciate it :-)

@Jasmine Anderson @Andre Beraudthanks! and you too! have you done a deal yet? Anything I can help?