All Forum Posts by: Jeremy England

But you said "These two examples are based on a 30 year term, and many hard lenders may only offer shorter times, so that number could be much higher."

please elaborate what you mean.

All HML flip loans I know of have interest only payments. So the length of the loan should really make no difference in monthly payment amount with a HML, whereas if you are paying down principle the length has a huge affect.

In above example it seems a hard money loan for 100k at 14% interest should be about 1166 month in an interest only payment

It wasn't my breakdown but i know what he is talking about. He is talking about the amortization. If a loan is amortized at 30 years, the loan payment will be lower. Even though the term of the loan may only be 1,3 or 5 years, the payments are basing it on a 30 years payback schedule.

He is saying some hml only amortize based on shorter periods, meaning your payments are more

I attributed the quote to the wrong person, my bad. I am not sure how I managed to do that, lol.

The HML flip loans I am aware of are interest only. so it seems in a HML the length of term should not make a difference in the monhly payment, because there is no principle pay down right?

Now if there is a HML where there is a pay down of principle then the monthly payment changes for various terms.

yes, but i think hml is being used as a general term. There are numerous lenders out there that do not consider themselves hml and who do expect principle plus interest payments

1 Vote

Originally posted by @Mike Dorneman:

@Ernesto Hernandez Many banks don’t require you to “season” the loan. So we buy in cash and refinwith cash, then just refi it back out. If I waited u til each BRRRR was completed and then started the refi process, I’d only be able to do 3 or 4 deals per year...

Are you talking about a commercial loan with 20 yr terms? I have researched this to death looking for a way to get my cash out of my current project and can't get past the seasoning req.

The only option I see available is a commercial loan which is amortized based on 20 year term, meaning payment is higher and cashflow is impacted.

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Originally posted by @Caleb Jordan:

@Jeremy England I like your break down.

But you said "These two examples are based on a 30 year term, and many hard lenders may only offer shorter times, so that number could be much higher."

please elaborate what you mean.

In above example it seems a hard money loan for 100k at 14% interest should be about 1166 month in an interest only payment

He is saying some hml only amortize based on shorter periods, meaning your payments are more

0 Votes

Originally posted by @Devin Scott:

@Jeremy England check out what Alex is talking about in the comments. It’s called delayed financing where you can pull out 100% of the HUD. He puts all of his rehab costs on the HUD at the title company and can refi without waiting for the seasoning period! 🤯

I don't know how people do that because when I was looking I was being told no. at least not without at least a 3 month seasoning

the bank i was talking to would only do up to 65pct ltv, regardless of the HUD costs without the seasoning

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Originally posted by @Lee Ripma:

@Devin Scott I suggest building a relationship with a commercial lender, they don’t care as much since they hold loans on their books and look at you and the asset. I find it easier to buy cash, rehab, then do a commercial cash out loan.

What sort of terms are you seeing on a commercial cash out? LTV? Amoritization? and rate?

I ran into this on my first rental, I bought with cash, then rehabbed with cash, then rented, then got hit with a seasoning requirement. This is for a 30yr mortgage. I spoke with a commercial lender that offered a 20 year amortization but a higher (6%) interest rate than I could get with a mortgage. So decided to wait for the traditional seasoning req. A 20 year amorti and 6% would exceed my monthly cash flow goal.

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I ran into this same problem with seasoning. Did you ever refi? I'd like to hear your experience as it went and did you everntually scale?

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Originally posted by @Will Fraser:

I have a client who was recently approved for a line-of-credit of sorts from a very small local bank. They did the underwriting on the front-end based on them as the borrowers (in this case an LLC investing in single family and multi-family) and once the approval was issues the client had the ability to purchase anything and the bank would fund the purchase at %75 Loan to Value. They could close in title+4 days, making it nearly as fast as cash for on-market deals.

Something like that through a small local bank looking to get into the investment real estate game could be a warp-speed-ahead button.

That sounds like a unicorn.

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I've bought cash, but also considered HML which I refi out of at seasoning. You can also look into personal loans, or private money loans with folks sdira

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got my start as a builder at 25 years old where alot of the same lessons learned apply, but didn't invest in rentals til I was 40. I'm far more cautious now than I was then. I have more to lose. Plus, for those of us that lost a ton in the crash of 08, we are more hesitant. So I'm going slow, and not overextending myself. If the market tanks again, I'll be ok.

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Originally posted by @Giovanni Luna:

OH WOW! i thought hard money lenders though higher interest rates were a better way to go. i might as get a personal loan and a lower price right, say like on 20k?

You likely can if you have good credit.

Navy fed, USAA. All these guys have personal loan programs for that much. Question is what is your plan for 20k. You arent' buying for that much, but you could certainly fund the rehab for another investor that needs a partner.

I'll be buying again around the feb time frame, if you are still looking by then. Maybe we can tallk

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All Forum Posts by: Jeremy England

Jeremy England has started 20 posts and replied 261 times.

Post: For those focused on BRRRR...

Post: For those focused on BRRRR...

Post: For those focused on BRRRR...

Post: Brrrr! Is refinancing easier when you buy cash?

Post: Brrrr! Is refinancing easier when you buy cash?

Post: Scaling Real Estate.

Post: Scaling Real Estate.

Post: For those focused on BRRRR...

Post: Anyone started investing in RE at age 35 or later?

Post: Scared of borrowing from hard money lenders and not make profit