All Forum Posts by: Joseph Coleman

@Robin Simon Thanks for the info Robin! 

Out of curiosity, 
-Do you have any tools or resources you recommend for evaluating a cashout refi to calculate how return on equity is impacted for different financing scenarios ?
-Under what situations are you finding that investors are doing cash-out refi's even when the rate today is higher than their current mortgage?
-In the DSCR world how common are pre-payment penalties or situations where a loan can be called due early by the lender for any reason? How does this factor into choosing whether or not to refi?

Thanks! 

@Terra Padgett 
Quick tip! You can search "JWB BiggerPockets reviews" on google to see several posts from investors about their experiences. 

Searching on BiggerPockets Mortgage Lenders and Hard Money Lending Directory is a great place to start checking reviews. 

Feel free to try out BiggerPocket's lender matching tool (in beta) to see what our investor concierge recommends for lenders in Jacksonville. 

Also, I love the Jacksonville market. Godspeed on your lender search! 

@Jesse Holsapple Thanks for writing in the forums. However, we do not allow direct soliciting in the forums. Feel free to reach out to me directly if you need help navigating BiggerPockets as a lender. 

@nathan smith

@Nathan Smith searching on BiggerPockets Mortgage Lenders and Hard Money Lending Directory is a great place to start. You many also find local banks and credit unions with a simple google search.

If you find a great broker they can search multiple lenders and compare options and rates. This is by far the most efficient option but they charge a fee for their services. 

Feel free to try out BiggerPocket's lender matching tool (in beta) to see what our investor concierge recommends for lenders in Indiana on multi-family. 

@Cheryl J McGrath Thank you for your question. I manage our relationships with lenders on BiggerPockets and glad to help answer any questions you have about our Hard Money Directory or lenders in general. 

BiggerPockets does not endorse any of the lenders on BiggerPockets.com and I would always recommend doing your homework to make sure a lender is a good fit for you.

That being said, I can tell you that, 

-Lenders on the first page of the HML directory are lenders that I work with directly and have researched on the BBB, NMLS, AAPL and checked their ratings on BiggerPockets and across other organizations. That being said we do not have a formal vetting process and the status of a lender on the NMLS or their AAPL membership (for example) may change so doing your own homework is very important. 

-Lenders on the second page and beyond of the HML directory simply signed up for a Lender Premium account.

Tips for vetting lenders:
I would break this down into 2 questions, 

1. How do I know if a lender is ethical and in good legal standing? 
2. How do I know if a lender provides great loan products and great customer service?

1. 
- If the lender also does conventional loans you can search them on the NMLS website here. 

- If they are a non-qm Hard Money Lender you can see if they are a member of AAPL, which also adds some credibility in my book. 

-Do a google search to check reviews and see if there is ongoing legal disputes. 

2. 
-Read this article and ask your lender where their capital comes from. The last thing you want is your source of capital to go away just days before closing. 

-Interview your mortgage originator. Your experience with a lender comes down to what loan originator you are working with. This is the person that is actually going to be picking up the phone when you call and will be critical in your experience working with a lender. 

-Check their reviews on BiggerPockets! Look at the people who left reviews to read about first hand experiences. 

-Ask people in the forums about their experiences with this lender. 

-The book "Lend To Live" gives extensive tips for vetting private money or hard money lenders. 

With all of that said, the most important thing you can do is speak with borrowers who have worked with a lender to learn first hard how they work with their clients. 

Let me know if you have any followup questions! 

@Account Closed That is a really great question because in answering it you will start to really understand the machine behind what determines interest rates and in turn what drives the entire real estate market at the macro level.

For example, there was an updated policy from Japan's central bank that sent up the 10 year treasury yield recently and that in turn raised mortgage rates (source).Who would have thought? 

This is the source that I use to track rates, they often give an explanation for what driving rates up or down on a weekly basis. 

Mortgage rates are ultimately heavily influenced by the Federal Reserve but the mortgage rate itself is ultimately determined by the secondary market buying and selling mortgages.

Mortgages (or mortgage backed securities) are just like treasuries except that they are often paid off before they are due (due to refi's).

So when the demand for fixed rate securities goes up relative to supply, the price for these securities goes up and the rate goes down (this is an inverse relationship). And vice versa. So they follow each other very closely because mortgages and treasury securities are very similar from an investors standpoint. 

The result is an uncanny correlation between the 10 yr treasury and mortgage rates. 

Gurjot Grewal I personally like to lock in my rate with one lender and float my rate with another lender. I am transparent with lenders through out the entire process. It's not in the lenders best interest but it allows you to have a backup incase something changes in the secondary market and your financing falls through with one lender. Given that you are a Canadian investor though, the rules or terms may be different for you. I would ask them at what point you are required to use them as your lender and what fees may be charged in the process. 

@Amos Raymond  The rates that Lien referenced are roughly in line with what I am seeing, I would caveat this with a recommendation that you, 

1. Get rates and terms from multiple lenders and give them a specific deal when possible. Highlight your previous experience to see if that will get you a discount now or in the future. 

2. Do not only compare rates but compare the fees as well and what benefits the lender is providing you. Many lenders need to pass on legal fees or charge points (a flat fee charged as a % of the loan amount) to originate the loan, which are not included in the rate. 

3. Ensure that you are aware of how and when the rate and terms of your loan could change depending on movements in the secondary markets. 

You can always check the rates quoted from the large lenders like, LendingOne, Civic and RCN on their website.

As for finding lenders,
Besides The BiggerPockets HML Directory or the BiggerPockets Lender Match (in beta), I would recommend talking with your title company to find hyper local hard money lenders that lend their own private capital as well. They can often bring more than money to the table, they can bring their expertise and network to ensure your deal goes well. The more expensive the money, the more value I would expect from a lender. 

For anyone who is just coming across this thread, BiggerPockets has a great book on the subject - "Lend To Live." 

Hi Kevin, @Kevin Galdamez

I manage our relationships with lenders and (if you have a deal under contract) I would be glad to run a search for you using our lender match program (in beta).

There are advantages in using a truly local private money lender. For example, like drive by appraisals, faster funding and getting advice from a lender that is much more experienced and knowledgeable than yourself. They may be more expensive (at times) but it is not always just about the money. Having someone who is local with skin in the game should increase your odds of success.

If you really want to know what the pros are doing in your market, become friends with a local title company and ask them for referrals to the private money and hard money lenders that are doing lots of deals. It may surprise you.