All Forum Posts by: Kevin M Finley

Figured I'd update- 

LendingOne and Lima One are both at 70% LTV on Cash-out and 75% straight for 30 year rental property loans. I believe Visio is at 60% still for Cash-out but have been unable to talk to anyone. Fees have all increased since February and the rate that was thrown out by LendingOne was 7.6%.

That said, trying to get an actual quote is proving frustrating. 

I could start over with $10k pretty easily at least in my area. 10% down payment on a crappy $25k house with a hard money lender and fees, and that leaves $5000-ish plus credit cards to get to the draw points in the reno. 

$2k though I don't know, that barely covers appliances

"Your offer is too low" "You're too greedy" "Why are you making 35% off this deal?"

The numbers add up- you won't pay capital gains- just ordinary income. Find your profit target (pre-personal tax) and then make your offers based on this. 

For me, I typically want to make $25k pre-tax per flip. After factoring in 12% off sale value to selling costs, utilities (which are super high for construction just FYI), vacant property insurance (3x regular policy), lender fees, dumpsters, cleanout, property removal, etc etc, it's absolutely shocking how much money you have to spend before you buy a single building material. 

My search has been fruitless so far as well. Until true private direct lenders get off the sidelines and start lending on long term investments, I'm not sure it'll change. 

Very unfortunate indeed. They are held in private money currently, but I am a full time flipper. Tying up my private money with long term assets not only costs more in the short term and hurts cash flow, but limits my long term ability to secure more properties. Additionally, when private lenders are expecting a short term loan and that is not the case, it strains relationships I've worked so hard to build, through absolutely no fault of my own. 

@Ken Calvin have you closed a loan with Bravex yet? I had my refi's completely halted in March and after a flurry of emails this morning to five of the bigger no doc rental property lenders, it appears that all long term loans are still frozen. It's costing me an arm and a leg to keep hard/private money on these properties

I was staging about 50% of my flips until recently. I worked out a deal with the stager I liked the most to only stage the common areas- Kitchen, bathrooms, living, dining. She charges a flat rate for this service and it lowers the cost, but still delivers stunning listing photos and a great front entry feel. I've found that my staged homes have sold an average of 11 days quicker and at a 2.5% greater sale to list ratio. Take that for what it's worth but for my business, it works. 

Diligent bookkeeping. Ensuring you can classify expenses properly is important. I had five-six going on simultaneously back in Q4 last year and let two crews slip. In December I started going to every property every day and overcommunicating with contractors and project managers. This allowed everything to get back on track, but was still a headache. 

I've dialed back a little and now have only 2 renovations, a rental remodel, and a new build on my plate. It seems to be a comfortable level and allows me to do some work myself, which I enjoy. 

Pretty much everything Chris said. I'd recommend hanging around local REIA events and getting to know some of the local players. It won't take long to figure out who is doing deals, who is posing, and who to stay the hell away from because they owe everyone in the room money.

Don't rush into a private lending deal. The goal should be to build a relationship with someone who can responsibly turn your money time and time again. 

I doubt any of them are doing 30yr fixed cashouts yet. 

If you call and talk to someone, they will give you a runaround and tell you that they're still lending and yada yada... then eventually they break down and say they'll "Run the loan right up to the finish line" and wait until they're allowed to fund. 

No thanks. I've already eaten an appraisal and fees on one loan that didn't close. I don't need it to happen again.