All Forum Posts by: John O'Leary

Capsource is looking to hire two motivated individuals to join our team as Loan Officers. No prior experience is needed—this is a fantastic opportunity to earn a great income while learning the ins and outs of real estate investing. If you're eager to start a rewarding career and grow with us, click the link for details and to send in your resume. Apply now! 

https://www.indeed.com/jobs?q=Capsource&l=&from=sear...

It's challenging to secure a Hard Money loan for fix and flips if you're considering a second lien position. Hard Money lenders prefer first lien positions during the rehab portion due to the enhanced security, control, and financial stability it offers. When you request a rehab draw, the lender will search for mechanics liens and see the second mortgage. This typically results in rehab funds being frozen until the second mortgage is lifted. As Chris outlines, if there is a private investor willing to lend the down payment funds secured via a promissory note, and not an attached lien, it is possible.

 I think newer, less established, and daisy chain Wholesalers often don't consider the needs of the end buyer (investor) when underwriting properties. Their focus is on maximizing their markup rather than accepting a smaller profit to ensure the buyer can profit from the rehab and become a repeat customer. Many wholesalers fail to understand the long-term value of maintaining strong relationships with buyers.

As a general rule, If tenants occupy the property for 30 days or more, they are generally treated like long-term tenants, with the primary difference being specific terms in the lease agreement tailored to the mid-term duration. However, if the occupants stay for less than 30 days, the rental is typically considered a short-term rental and subject to different regulations.

Hey Kwame,

I'm in Orlando. What are you specifically looking to do/learn? 

Hi Kiefer,

It's great that you're immersing yourself in learning and have already taken the first step with your duplex. I would start by getting clarity on what specific area within REI you want to focus on. Once you have that clarity, build a team around you—this could include a real estate agent, a lender, a mentor, contractor, a solid title company/Attorney and possibly a property manager etc. With a clear focus and a solid team, you can take massive action confidently, knowing you have a strong foundation to support you.

Best of luck on your journey!

 Read Dennis's post above. 

@John Cardinale 

I meant that you can use a hard money lender that offers DSCR products, as traditional lenders do. Lenders will require the borrower to have the 15-20% down payment plus any reserve requirements for underwriting purposes.

Regarding your question: Are you asking if you need to have the 20% difference in cash to bring to the first mortgage closing and then have the seller lend it back to you right after closing? Or are you considering having the seller front the money for closing and then record the second mortgage immediately after?

I've seen both approaches. The seller may place the 20% in escrow, secured via a promissory note, and then record the second mortgage later. While the lender doesn't want a second position at closing, there's usually nothing preventing it afterward. It ultimately depends on the specific underwriting requirements of each lender.

Use the hard money to get 80-85% of the purchase price on a DSCR loan, (assuming this is turnkey) and use seller financing for the 20% down payment. Have the seller hold a silent 2nd until the 1st position lender records the mortgage than have them attach the second. You will need to show you have funds but this is a strategy regularly used.