All Forum Posts by: Jacob Thompson

@Kenneth Garrett

Still, even at 80% refinance that leaves you with a remainder of $15,000 after paying your PML... how were you still in at $5,000 after it was all said and done?

@Kenneth Garrett

I’m sorry for my lack of comprehension but I’m not seeing the $5,000.

How I read that is as follows:

PML - $85,000

Remod. - $17,000

= invested in at $102,000

Appraisal says home is worth $125,000. Bank says they’ll lend you 75% which would put you at $93,750.

$93,750 - $85,000 (you owe your PML) puts you at a remainder of $8,750.

I dead end at $8,750. I’m sorry.

@Kenneth Garrett

So then you don’t use the private lender as the full term bank (what I mean is you’re not financing 50-70K and saying you’ll have it paid off in 6 months without a conventional loan to make the payment) you’re essentially using the PML to get you into the house.

Once in the house, you renovate and then refinance through a conventional bank at that point?

And then I would guess, with the refinance whatever equity you’ve built into the home is what you pay your PML off with and the remainder you can rather cash out, invest in another property, etc.?

Am I on the right track here?

@Kenneth Garrett

So would you say HML is more to get a deal done swiftly, knowing you'll have the capital on the back side to make the return quickly and PML is more for people who can't get a conventional mortgage loan through a bank?

Also, how many years typically are private money notes? What’s your annual interest for private money?

And where/do you have reference to a private lending company?

@Kenneth Garrett

I apologize, which question was I not descriptive enough on?

Also, when you say lien “position” is that essentially priority on who gets paid in what order on foreclosure? (Ex. First lien position, first priority - second lien position, second priority, etc.)

Repair phase - For example buying a “fixer-upper” and being in the phase of making the unit livable for a tenant. Essentially having no cash flow at a time when loan expenses would still be due.

New investor here (still looking for my first deal) and I’ve got just a few questions...

1.) When it comes to PMLs/HMLs which would be better to utilize starting out? When is a time each is more affective?

2.) Would you suggest using leverage starting out or using your own upfront capital & going the BRRR route?

3.) If an investor does go PML/HML route & things go south and defaults on the loan what happens? Would it affect your credit if you made the deal through a business entity?

4.) Also going through the PML/HML route, how does one make the monthly payment on the loan when your unit is vacant and you're in the repair phase? Credit cards? Own personal capital? Or are there clauses in loan contracts deferring until a unit is occupied?

*** I want to thank you for taking your time and going through these for me, I understand many are busy and have better things to do but the help is truly appreciated!***