All Forum Posts by: Kerry Boyle

 
I agree. As a lender, I'm often only asked what are my interest rate and points. I was curious if others found value outside of those two items, things that aren't often asked. Each one of the above can certainly be the best choice for an individual, each person is different and has different financial goals, needs, and wants. 

Theory question here, curious as to everyone's thoughts.

$155,000 purchase; $50,000 rehab; $350,000 ARV.

Would you rather: 

A: Fund the entire thing on your own, $205,000 + $3,000 closing costs.

B: Pay 7% I/O, and put down $30,000 (incl all closing costs + 3mo payments).

C: Pay 10.5% I/O, and put down $9,000 (incl all closing costs + 3mo payments).

Has anyone used a HML for the purchase only?

• Yes, this is a thing. I believe that if you are planning to rehab, the lender will want to know what you are doing. This is to protect their collateral (i.e. someone coming in and demoing the property with no experience might not get the purchase financing :) ).

I would rather pay for the rehab with my business lines of credit to save money. 

• Have you calculated what it would save? Is your main goal profit/project or ROI? It may be better to use your BLOC to finance more purchases if you have the bandwidth. I love math :)

How would this affect the reserves they want me to have? Thanks in advance! Tyler

• My best guess (every lender is different), is that it would reduce your reserves required. Not all lenders require reserves to be vetted, as @Stephanie Potter said. When lenders check reserves they check down payment, closing costs, and usually a few payments. If your loan is smaller because you aren't getting rehab money, your payment requirement and closing costs would be lower since they are all or mostly calculated by loan amount.

You can use the biggerpockets "Network" tab. Then go to hard-money and search your state.

They recently added a new feature allowing you to put in some basic info and get a lead request sent to the company.

 The original reason to create HQ2 was because Seattle is running out of talent and the company is having trouble accommodating a growing company with a stagnant hiring pool. Can you think of two places that have higher education percentages than NYC and DC hubs? 

I agree about work from home stuff though. I wonder what the statistics around productivity are from full time stay-at-home vs some amount of time in the office.

Most HML sell their notes to bigger funds. At 12/2, you can make up to 2% selling the note. You just have to be inside someone else's box (or at least that specific loan does).

Also, fantastic advice from @J Scott. 

Selling HML notes (or correspondent lending) resolves capital limitation and can increase your lending box. It might make sense if a fund's cost of capital is significantly less than yours. I.e. their cost of funds might be 5%, so they can spend money to get the notes and earn more on the strips than you would have.

 Only concern is the possible disjoint between your HML requiring you to close as an entity (if applicable) and your bank requiring you to close as an individual.

 Usually, banks cut investors off at 10 properties. Put your 10 most expensive properties on bank lines and all others are on rental loans for investors (the hard-money equivalent of long term amortizing loans).

Borrowing entity had 10+ flips in past 3 years, applicant had 680+ credit. We funded 90% of purchase and fronted $92,300 from their $470,250 rehab budget at close. When they complete the first $92,300 of work, they get draw #2 paid directly to them for $79,000. Complete draw 2, get draw 3 for 147k. Complete draw 3 get draw 4 for 112k. Complete project, get remaining balance of about 40k (appliances and landscaping).

Call or email me today. 42 States including California.

@Shawn Ward sent. Thanks!