All Forum Posts by: Kerry Boyle

Was 536 your net after the sale? My brain hurts because I can't come up with the math here.

Acquisition: $363,000
Down Payment: $33,000

Repairs: $95,000

Closing Costs: $2,000

Sale Price: $536,000

536-2-96-33-330= $75k - $35k (Profit) = 30k.

So 30k left over to pay HML, Realtors, and title company for the sale?

Hi Lisa!

You should be in contact with a hard money lender (if that is your source of funds) before putting in any offers to get an idea what their process is and what requirements you need to meet.

Afterwards (or at the same time even), find a deal and bring it to them (ideally with your plan and construction costs). They should respond in less than 1 business day with estimates at the very least.

LMK if this doesn't answer your question.

Hello @Ryan Lawson!

Lenders will lend in states where they are approved to lend - this means a company in Maryland may be approved to lend throughout the US, or only a few states. 
The reason lenders may not work in all states is due to licensing. However, some lenders may be able to do business on a case-by-case business in states they are not "approved" to lend in.

KY has limiting factors for lenders, which is why there may not be as many as states like PA or NJ.

BiggerPockets has a Hard Money Lender section in the Marketplace which will help guide you to some HMLs. Good luck!

 Some hard/private money lenders that don't back their loans with an agency may not have seasoning requirements at all! Slightly more expensive, but it is the cost of time that you weigh it against.

Nice rehab!

The strategy of putting a higher than required amount down is an interesting middle of the road take! 

From the perspective of the lender, the lower LTV there is, the lower the risk. That means you should be able to get lower points/interest than maxing LTV on your first project.

@Jason A. First congrats on a great deal!

In this scenario, his greed will actually reduce his long term gains with you as a client, since (I assume) you will be bringing your business to someone else in the future.

This is one pitfall of local small-time HML from what I heard. Hopefully you can get out of this deal with some decent profit and build a lasting relationship direct to a lender that won't screw you over for a quick buck.

@Cynthia Ng you could always look for a HML to cash-out quick from an investment property or two. The money will come much faster than a HELOC, at the cost of being pricier. Time may be a compensating factor though. Most HML close in less than 10 days and some don't require seasoning periods.

Hello @Alexander Alguire!

Great work saving money! Typically HML will require a minimum of 25% down from the buyer. Funds can be slightly diversified if you have 401k or retirement funds, other non-owner occupied properties to use as collateral, and "gift funds" or partners.

So @Paul Khazansky is probably right, as HMLs typically have a minimum lending amount. I usually see 50k as a minimum but there may be lower minimums for lenders as well.

Also, for no-income documentation scenarios you would need enough money in the bank to cover 25% down (minimum of 10% if you can use a property as collateral), closing costs, and the interest due over the term.

Hope this helps! I was just being general with all of these terms as well, HML's do vary a bit.

@William H. Have them do the same thing with a hard-money lender. The loan is based on the asset and interest rates will be higher with fees, but as a realtor they already know this. 
I think they are shopping you for a fantastic deal while you take on the same risk as a hard money lender with none of the support if something goes wrong. 

Thanks!