All Forum Posts by: Kerry Boyle

Look at what a hard money lender requires and then try to beat their rate with your private lenders, deals should be structured roughly the same. Up front costs should be negligible, and if there are any at all, they should be able to provide references. Title companies are good references. 

POF letter is free. You may email me or give my cell a call. 10 mins.

You are saying you cannot find a cheap enough house. What do you mean by that? Do you mean the purchase price vs the ARV?

Also, HML usually are charging interest only. Conventional financing will require employment with income, so if you have the assets but not the income you will have to change the source of funds.

Don't get too caught up in the interest rate, a 6 month project at 12% on 100k loan vs a 6 month project at 8% on 100k loan will only save you 2k. Also, only those borrowers with great experience AND a good credit score can get less than 10% on a hard money loan.

Look at your profit and how that changes with your expenses to see if you should proceed with the deal. Don't walk away from 30k profit to avoid paying 2k in additional interest just because 12% sounds high.

 As a lender, I agree with this. However, if you do a significant value add like a renovation, then your value will increase as soon as the project is complete.

Loans typically start at least at 50k - some private (small) lenders may be able to lend at less without the costs eating up all the profit.

I have noticed that other lenders in the DC area start their loans out above 200k... essentially saying they only want to do DC metro and not go too far out.

@Lucas Mills just want to point out that your numbers are all wrong on the interest. In your example, you are using 6%/month in interest. This would be a 72% interest rate annualized. 

Try: Loan amount x Interest rate / 12 to get your monthly payments. 

Also in reference to seasoning, it is a fannie/freddie guideline. Portfolio or private lenders choose (or do not choose) to abide by seasoning requirements.

I say it often, but there is (almost) nothing stopping a hard money lender or private money lender from refinancing you the day after you purchase/finance a property. THEY MAY have overlays that don't allow them to refinance within 6 months, but not all do. 

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You can use a hard money lender to vet that the property is profitable and the repairs are all things that will increase your margin. All lenders comfortable with lending in your area will have a huge presence in reviewing the repair bid, ensuring you aren't paying too much and that the repairs are purposeful.

Using a HML will also leverage your money, reducing your risk and allowing you to keep your money close to your chest in the event the repairs are more considerable than initially estimated.

@Juan Lopez I have to second what @Joseph Gozlan said. Tough to get started if you have no money. However, this is an excellent way to do it. Almost any investor will go in with you if you can bring them a deal.

Pretty much all the threads I have read that say "How I got started with no money down," they have someone (usually a friend or family member) providing them the money to get started.