All Forum Posts by: Kerry Boyle

No problem!

Just a bit of further perspective from a lender, there are fees/costs associated with generating a loan and risk factors on lower value properties as well. I have seen a few lenders advertise as low as 40k minimums, but other lenders find 150k to be their floor where a deal is profitable enough to complete. Most stick to $75k as a minimum.

Also, most lenders have good requirements - like at least 50% of rehab budget required as contingency money for first time flippers (example I have seen) as well as reviewing your contractor bid to make sure you aren't overpaying. 

DM me if you want to see my math or talk to me any further regarding this.

If I were you, (and getting a loan from someone's IRA isn't an option) I would talk to as many lenders as possible - a partner is going to eat your profits more than a lender will. Will someone experienced go 25-30k in on this project for a return of less than 8k? Maybe...

I have to agree with Mark here regarding C not really being an issue.

Example: Let's say they charge you 15% and 5 points (also let's say $900 in junk fees) and you can complete the project before 6 months.

• You pay $8750 towards a down payment on the house (25%). Cash to close is $10k-$15k.
• Lender pays $56250.

• Lender makes $3,982.00 from origination (including fees and a few draw inspections) and $4,218.75 from interest for a total of $8,200.75
• Title/Appraisal loses you money on the origination (I'll estimate 500 appraisal and 1200 title). Cost $1,700.00
• You sell with a realtor, who takes 6% of the sale price $8,400
• Sadly, you pay title at closing and any other costs, let's say $3,000
• You are left with at least $50,000 profit.

Also, the lender should be more comfortable because you still have at least 20k contingency.

**All numbers I gave were off the cuff estimates.

From what I have seen in Florida, 2-4 points and 9-14% interest is competitive. For HML's, rates/points are commensurate with experience. Credit, property, location, and assets also play a part in the total picture.

Feel free to DM me with specifics!

As a HML, we provide them if requested after we review your credit profile. POF is not quite as serious as a pre-approval where we would review your bank statements too. Either typically work for a seller to move forward.

In my perspective and from what I have researched, a hard-money owner occupant is a difficult thing to find; Also a hard-money second (although a bit easier) is still hard to find.

I don't know much about California (there are much more laws there than anywhere else restricting lenders), so I can't provide a bunch of information. 

Can't your friend cash-out refinance and have one larger first lien? - if possible it would be cheaper too, I bet!

More of a BRRRR strategy than a flip from what I have seen. I have seen huge cash-flows from our investors there.

There is a market everywhere you just have to find out what the niche is!

Hello Will!

Congrats on closing! I'm curious, who did you use as HML and what did you get in rate/points? Feel free to DM me if you want to.

Best of luck!

NY is a very tough state to lend in. @Kyle Simmons have you brokered loans before? Do you have the clients? I'm just curious where you are coming from in the jump to HML.

I'd love to hear more about how the money side works for you. DM me if you want to chat.

This is interesting. I can't imagine him not being of the mindset 12/6 for the first deal and 12/4 for the second.

No experience, low FICO, and no cash reserves... what are the compensating factors here? Is the rent you are getting solid? Are you holding payments in escrow with him and have you decided how you will get out of the refi? 

If I were looking at this deal I would really want to know rent and exit strategy, and try to use them as compensating factors to even fund this loan at all. He must be truly asset-based and not afraid to foreclose or force the sale of the property if you can't get out (where you would pay hefty fees each month past maturity). 

Those who are saying points are high, do you know a lender who would do this cheaper with those factors?

In terms of rates, 10-12% seems fair. They can look to their retirement accounts and see the interest gained and try to match/slightly beat that. A SDIRA is a great way to do this and it gets a custodian involved to assist with overseeing the paperwork - a plus if you don't really know what you are doing.