All Forum Posts by: Paul Khazansky

It varies quite a bit.  Many lenders collect monthly interest-only payments, some have a built-in reserve for either full or partial interest, and some may not collect any interest until the maturity of the loan (has to be a very strong deal for this to work).  

Getting a settlement statement, or HUD-1, from the title company is super-standard. Sometimes you may have to go through several iterations (mistakes, new things get added, etc.), but in the end, you should have a statement that will be very close to the final HUD-1.

I agree with @Account Closed -- Experian is relatively painless to use

@Gloria Grotjan - You pretty much have to start with your local community bank, as they are most likely to give you a loan for say, $5 -$6mil for an 80,000 sq ft self-storage project.  For national banks, this is too small of a project and it would be rather hard for you to get on their radar.  It really helps to have an existing relationship in place that you can leverage with a local bank.  Also, you would need to already have raised the equity and ideally close on acquisition of the project in order to get the financing in place.  

Typically this should not be an issue as long as you are bringing enough equity (i.e. cash) to the deal at closing. Buying a property for say, $70,000, and putting another $100,000 of rehab capital into should not be a problem as long as (a) your comps support a high-enough ARV, and (b) you are bringing enough equity to the deal.

I've seen this happen when the seller believes he is getting a good deal on the sale price.  In this case, the seller actually got +15% higher than his real estate was worth - that got him to agree to hold the second lien for 25% of the purchase price.  See if you can find comps that would convince the seller that he is getting a great price from you.  Also, if the real estate has been on the market for a while and it not finding a buyer, it could be a good opportunity to negotiate the seller to carry 2nd lien.  Never hurts to ask!

Hi @Cesar Martinez

The issue is that you have a young person without any experience.  To mitigate this risk, you would need to bring either a good amount of cash at closing (thus reducing the lender's exposure), or find a deal that has a good amount of "implied equity" in it.  So for example, finding a house for $60k that is really worth $90k is one way to have a lot of "implied equity" -- these are hard to find, but they certainly exist. 

Dominion are our biggest competitor in the Baltimore market! From what I hear, they're a reputable, well-run firm. 

Paul

Just keep in mind that hard money lenders would want to see "skin in the game" from you as an investor, so that $11k will likely be eaten-up by your contribution (i.e. your equity) in the deal.  I think $20k is a good start to (a) bring enough equity into a deal (for a smaller deal), and (b) have enough cash to float you through construction draws.

Good luck!

We are not excited about land (at all), but will consider lending up to 45% of appraised value.