All Forum Posts by: Karin Crompton

Thank you all for the thorough replies. My partner did double-check and the lender we're speaking about told her it's an inspection fee and takes the place of an appraisal; they do those in-house and there will not be an additional appraisal fee. And I want to be clear that he has NOT added extra inspections and the like - I came here to confirm what I might expect as normal, and what would be bologna, should the situation arise.

Karen M., as far as where we are in the process: we have a contract in place to purchase a bank-owned property, closing is scheduled for the 24th; and we've contacted our local hard-money guys, some of whom we've met and spoken with before to discuss the process (they come to our REIA meetings), and a couple who we recently discovered but have not talked to before. We've also contacted some people regarding private money ... cross your fingers, we hope to have a combination of funds and mitigate the hard-money fees. (We are aware of some of the logistics of first/second place on mortgages and have placed a call to our attorney regarding potential issues in using more than one private money source.)

This particular HML I mentioned seems legit, though expensive. He also runs a traditional mortgage company that's been in business for years, and he was referred to us by a Realtor in our REIA. I just hadn't heard of a $425 inspection fee, though it makes more sense if that's his appraisal. Terms are 6 points, 12% interest, 1- or 2-year loan, interest-only payments w/a balloon at the end. He wants a hefty amount of our own money (like 30%) but will fully fund the rehab costs. He's running a credit check and coming to see the property. My partner has had the bulk of the conversations w/him, so I'm not sure whether he's formally made the loan contingent upon the house passing inspection ... and whose inspection, btw? His?

Thank you again for the input!

Sonja, thank you for the referral, I will definitely check them out. And I'll probably be looking for info on staging a little later down the road!

Thanks,
Karin

Thank you, @J_Scott. This better be an appraisal when he comes to the house! I just asked my partner to confirm that that's what he's doing. Otherwise I can't imagine what he'd want $425 for.

Just trying to anticipate here, but what if he or anyone else says they want something inspected? Obviously that's on us to pay for it, but how often does it happen?

I'm looking for some info on what's considered typical vs what fees would be indicative of a bad lender - not the dollar amounts, just the categories, though if there are standard $$ ranges to be aware of, please say so. I'm looking to compile a checklist of sorts for myself to better facilitate the process (until I meet more private lenders and break up w/these HML's!).

I understand the basics: varying amounts of points, high interest rates, we have to put some of our own money down, the lender may or may not fund rehab costs.

We're talking to some HML's for an upcoming closing on a single-family rehab project to compare rates, terms, etc. The first one we spoke to sounded interested on the phone and wants to come to the house to "inspect" it. He's charging $425 for this.

What else should I be aware of? I've heard HML's sometimes find "problems" with the house so they can send people out for one inspection after another, charging each time. How many other fees and inspections are there going to be in addition to the regular terms?

Thanks for any input!

Hi Ray - we need more of us here! Small state but we've got a lot of great investors w/lots of experience and a lot of brainpower.

Hi Jon - good question. I am dipping my toe into some other markets and have found a great Realtor in Toledo, Ohio to work with. I'm looking for what would basically be a "cheap" house out there, where I could pay cash and put it on the market w/seller financing and either hold it or potentially sell the note. It's proving tricky to evaluate properties long-distance but I feel it'll pan out. I'm looking at that approach as complementary to what I do in CT at the moment; but when I learn more and get better at it, who knows, maybe it'll be a better business model!

I'm open to other states if I can find folks to work with who I trust will be honest w/me about describing neighborhoods and sales trends/comps as well as house condition (though I would also ask for a bunch of photos).

Got anything in mind? :)

Thank you both, I'm looking forward to meeting people here and learning from others. I like the real-world experience I see on this site and the fact that people here are doing this stuff right now.

And Tiger M., you're very kind - I think I wouldn't mind being a shooting star! I promise to give all credit where credit is due. ;-)

Hello! So my husband is a sports reporter/columnist, which means I've listened to my share of sports talk radio. I feel like so many of the callers - you know, "first-time caller, long-time listener." That's me ... first-time poster, long-time reader of this and many other sites online.

My current focus is on single-family rehabs in CT with a goal of expanding into buy-and-holds by the end of the next year. I'm also exploring investing in other states, which are SO much more affordable than CT. At the moment I am fairly well educated (boot camp and conference attendee, faithful member of my state's REIA meetings, good researcher) but a little under-experienced, but I'm gaining ground! I own a buy-and-hold in New Hampshire with my family that we use as a vacation rental, and currently have 2 rehab projects under contract. One is scheduled to close in about 2.5 weeks (see my Marketplace post on seeking private funding!), and the other is a short sale in which we are awaiting word from the bank.

I am extremely fortunate in that my business partner is my mother, and we work really well together. She has 32 years' experience as a real estate agent/broker and appraiser and has done some investing along the way; she also helped a husband-wife team of investors to purchase approximately 100 foreclosures about a decade ago. We teamed up a few years ago and got really serious about a year ago. She doesn't want to make the small money on listing properties anymore and I want to make enough money to be able to spend time with my 2-year-old son rather than at a job.

Thanks for checking me out! haha Thanks also to Bigger Pockets for a very useful site; it's so refreshing to see people sharing information and tips without expecting big fees in return. A colleague at my REIA referred your site to me as an alternative to the "gurus" and loan sharks out there.

Thanks, Jon - will do!

Hello! I'm new to this website and forum so please let me know if I've missed any details I should have included in this post.

I'm seeking private money for a single-family rehab project in CT; we do have hard money lenders available but we'd like to reduce our fees and also forge long-term relationships for repeat business and projects, including future buy-and-holds.

Some info on our current project:

• ARV of 250k, we're seeking up to 150k, which includes purchase price and rehab
?• We're looking for a 1-year term, open to discussing rates, no prepayment penalty
?• Single-family home; 4 br/2.5 bath, 3275 sf Victorian/Colonial, 2-car garage, full basement, built in 1900; public water and sewer, gas
?• Bulk of the rehab includes hardwood floor refinishing; wall and ceiling repair; interior paint throughout; 7-9 new windows; either an exterior paint job or new siding. I've walked through twice so far with my contractor.

An attorney would of course handle the funding/transaction - you choose or we have several we can recommend.

Please feel free to ask any questions here or to message/email me for details. I have photos, comps, plus additional information on myself and my business partner.

We're also open to suggestions. We learn something new with each person we meet!