All Forum Posts by: John Geldert

Hey All, Im in the process of scaling my business and looking to bring on another GC. I currently have a couple projects going on in Stroudsburg and concerned that I'm running my current GC a little thin. Any one have a recommendation for a GC that works in the Stroudsburg, East Stroudsburg area? Thanks!

@Ryan O'Mara 

@Doug Smith

@Paul Alvarez Thank you all for the informative feedback.

@Account Closed Thanks for the explanation, your correct I didn't understand what I was getting into and they did not explain thoroughly. I was working on my third(and final) extension of close date and just wanted to get this deal done. At the end of the day it all worked out...

@Mike H. Thanks for the response. The only thing I can think of is because of the logistics, 2 weeks to close and lender being on the other side of the country. They did not order the appraisal until weeks after the deal closed, which may be why the holdback contingency was included. 

Thats a great point on having them finance the rehab, this was my first go round with an HML, I learned a ton and will definitely be more educated next time I need to use this structure.

@Paul Alvarez Thank you, that may explain it as this lender was based out of CA. 

@Account Closed Did you end up foreclosing on that property?

In this case the HML lent 80% of the total project which was a purchase price of $115k + $22k rehab=$137k giving me a principle loan of $109,600. My issue was that on top of the the money I put down, the 2 points up front and all the other excessive closing costs that HM comes with I now had to come up with an additional $22k(or a portion of) to get the rehab started.

@Michael Weis Thank you for the kind words!

You are correct there is no such thing as the "perfect" time. The best time to buy real estate is always five years ago...

Have you figured out which strategy you would use once you do take the LEAP?

Earlier this summer I funded one of my BRRRR properties using a HML (for the first time). The terms were not that bad considering I got the the property at a steep discount and they were able to close in about two weeks. Shortly before closing the lender insisted that I bring All of the funds for my rehab to closing as opposed to just "showing" proof of funds. I was instructed that they would hold my money and I could make draws against it as the work got completed. This obviously threw a wrench into my strategy as I needed to come up with an additional $22k in a few days in order to get this deal closed. The deal closed, I finished the rehab and was able to recapture all of my funds...

My question is; do all hard money lenders insist one holding your rehab capital? Has anyone had experiences with HM lenders that do not require this, if so can you please share?

@David Weintraub when I say holdback I mean that I needed to bring my $22k rehab budget to the closing, Anchor Loans would hold those funds and allow me to draw against it once portions of the project were completed and verified by their appraisers. Again this is my first time dealing with hard money and Im not sure if this is the standard or because its my first deal with Anchor...

@Jay Hinrichs it appears you have a long track record of deals with HML is this common throughout the industry?