All Forum Posts by: Joe Davis

Lenders with new builds especially can be overly cautious. As building is a long way off from a rehab. If you have a good GC/Builder who has done many of these, that will often suffice for experience. Even give up a tiny bit of equity needed to the builder on it. Once the first one has a successful exit.... there's your experience.

The land you acquired was pre foreclosure? Or was taken as a foreclosure (ie tax sale)? If it was purchased before the bank took it back, no problem. But if it was bought at auction, just be cautious of the right of redemption. 

Hey Chris,

I am smaller, direct lender in the Houston area - I have some really good resources and free mastermind for lenders suggestions if you need them.

Feel free to reach out!

Some good answers on here. As a smaller direct lender in the Houston area, yes we could negotiate rates. But as others have said on here what are the variables that would want us to make less on deployed capital? Is the borrower highly experienced, is the deal a homerun, is there any other unique factors? Is the negotiation more of the deal structure (LTV vs. LTC) or is it more to ask for a lower percentage of interest, points, doc fee etc.

Hey Kyle, as a lender of both hard money and DSCR (refi) I am happy to send you over some term sheets which show you exactly what your out of pocket would be, and your cash out would be on the refi. You also need to consider the debt coverage (ie holding costs).

My suggestion on the first is to have a good team. What market are you located in, do you have a good contractor, does the rental comps conform to a healthy DSCR ratio?

The actual cash you leave into the deal is more dependent on a few variables. 1) Was the deal bought correctly 2) how fast can you exit and get it bringing in cash 3) How is the debt structured, and how much cash are you leaving into the deal at exit. 

Obviously, the goal is to leave as little cash into the deal as possible, but the other above issues can contribute (almost every deal we have seen go south is from a bad GC). 

As a buy and hold junkie i hate saying this, but sometimes its best to flip one first. Go to local meetups, see who is prevalent in the contracting side of things but also find a solid, local lender. Eventually if you establish a relationship with the lender, you can get better terms (if they are direct) Partner with the very well reviewed GC on the first deal maybe...give up a little equity in the deal. 

Most lenders are going to (due to experience) give you less - ie 75-80% loan to cost. But once you build your experience with them they will lend 70-75% loan to value. We have a little, rough calculator on our website that shows cash out of pocket on each scenarion. 

Message me if you need any additional advice, and GOOD LUCK!!

Quote from @Doug Carroll:

I have close to 1 Mil in funds available from LOC's on current portfolio. I want to put it to work and thinking of lending some of it out. Curious what current hard money terms look like in midwest. Thanks!

 Hey Doug, we are a direct lender in Texas. We lend in Houston, San Antonio and Dallas. We are working with new investors if that is of interest, however if you prefer to have your capital loaned out in your own back yard - we are part of a lender mastermind that I am sure has a few who lend directly in Indiana. Either way - happy to chat and see if I can be of assistance. 

Quote from @Miranda Yanez:

Hello!

We are seeking a lender that can fund projects in Missouri. We have a fix and flip that we are looking to fund. We would love to further discuss. Details are below!

Purchase Price: $45k

Rehab Budget: $70k

ARV: $165k (Low End)

Please message us, let's chat!

 Hey Miranda, let us know if you found a lender you "click" with, and how the process went! Agree with other posters on here about the minimum amounts but seems like your total loan is going to be around $100-$110k so you should be okay there. A lot of national lenders have bumped their minimums up to $100k - but its still possible to find $50-$75k minimums. I would also really dive deep into your local market and see which lenders come up a lot. The way we would do this is to search county records, looking at recently closed investment properties and who was lending on them - you will start to see some interesting trends, and worth reaching out to the lenders in your market who are consistent. 

Hello BP Community, 

Anyone in here (Lender) willing to share their CPA recommendation with me? Preferably someone who has some experience with private/direct lenders in Texas.

Would be much appreciated!

Great, thanks Mark! Will be in touch for sure. 

Quote from @Pamela V.:

Something that is very simple, but not addressed in any of the books or podcasts has me stumped: if you are investing out of state, do you apply in your home state, or at the location of the property? Thanks in advance! 

Are you looking for short term date? Your lender will essentially tell you if they lend in the location of the property or not. Same goes for long-term. If you are using a non-QM (DSCR) lender, they will advise you if they have programs in that state...is it too rural etc. 

Quote from @Paul Sedillo:

I would be interested as well, let me know if this comes together.

 Thanks Paul, will do! Hopefully we can get a few on board. I will send you a message