All Forum Posts by: Kerry Boyle

@Tim Youse are you using a lender in Baltimore? 12/3 is kind of average pricing at best. I'd like to know what your typical deals look like. 

Please for the love of god don't pay 14/4 in Texas. Are you going through a hard money broker? I don't even know any lenders doing interest rates/points that high there.

Here are some other benefits of using a hard money lender.

1. Hard money lenders want to ensure your project is profitable not only to them - but to you.

2. If you extend a good portion of your cash and something comes up and you need more than you have... wouldn't it have been less risky having that cash in the bank?

3. Can't say this part enough - you get a second (or more!) set of eyes looking at your project, area, values, and they have tons of experience!

4. It is like doing a joint venture - except you don't profit share at the end and you keep all the profits. HML costs are fixed and negotiated at the beginning of the loan, leaving you to take all the profits at the end.

I don't know how many times we have saved a borrower from a contractor that had a suspended license, who didn't quote them properly for HVAC, or who charged 20+% more than the bid should cost in their area.

90+% of hard money lenders you talk to won't lend as a second lien (i.e. lend on downpayment). Another 90% won't lend less than 50k.

You probably want to find a lender called "gap lender" or a private lender. You can also search for Joint Ventures.

Hello @David Seale,

I have a calculator that I use to quickly calculate all the loan numbers. While your equity position may be tight, your cash flow looks fine... if you can rent it for 2k/month. Shoot me over your email and I'll send you my excel calculator.

Welcome to BP @Gem Montero

I had to post here because, as a family man myself, I found it very endearing that in your first post to an internet community you introduced your family. Kudos and best of luck!

I think this is a viable strategy. Please be aware that your debt will increase and this will actually have a legitimate change in your credit score. 

Everyone will review your credit score, even HMLs, to ensure that you aren't a big risk. 

My point is, if you use a HML that doesn't have money seasoning requirements you can shorten your timeframe and decrease your exposure to the debt and end of 0% term. Best of luck, feel free to connect for any specific questions.

Great question!

There are a few ways to finance an auction purchase, but only in certain states can you get away with it at the auction's closing table (or by their date). Georgia, at least with us, is not one that can be financed straight from the auction site (however, private and local HML's may be able to finance if you have the right relationship).

Aside from that, you can pay cash for your purchase and refinance most of your money out plus get rehab funds immediately following the purchase with some HMLs.

Typically, hard money loans are interest only payments during the loan term and if you want to pay the loan term early, there may be a prepayment penalty or minimum number of interest payments that would need to be paid from their payoff letter. There also may not be any penalties - this is subject to which lender you use.

Private money depends on the wording, but most typically follow the same as above. I have seen people who paid 10% interest for a 6 month term, which means they were annualized at 20%. 

In every loan, you should be able to get a payoff letter that states what it takes to payoff the loan in its entirety. This would cancel the continuing monthly payments.

Don't forget national lenders!

Jay,

Is your end game just to immediately sell on MLS and pocket the advantage of buying cash at foreclosure? It seems to make sense... I think there is up to 90 days redemption in Ohio, is that something you accounted for already? I'm a bit off topic from your original question, but very interested in your plan so if you want to change to PM, feel free.

Thanks!