All Forum Posts by: Matt Powell

Can you explain what a collateralized line is?

It sounds like portfolio lenders are a bit of a "chicken or the egg" situation. They won't lend to you if you haven't worked with them before, so how can you ever start working with them? My takeaway is that you may be able to find one that will work with you (I haven't had luck yet with good income, good credit, and no experience), but you'd go into it knowing your terms won't be much better than hard money. Maybe the most likely path of entry with portfolio lenders is to use hard money for your first couple deals to get that "experience" puzzle piece they're looking for, then maybe they'll work with you?

And good thoughts on the GSE limits. I'm just not there yet, so it hadn't crossed my mind. I was never saying portfolio lenders don't have their uses.. only saying that I didn't see the advantage for them to fund a rehab-then-rent deal and not a flip deal.

So help me understand this. I assume what you're saying is that there's not enough time for the lender to collect any interest on their money when the borrower pays it all off in 3 months when his flipped house sells. But consider how I'd use a portfolio lender for a buy-and-hold property: I'd use their loan to purchase and rehab the property, and when I'd finished rehabbing in 3 months, I'd refinance the loan to a 30 year fixed (or whatever vehicle makes the most sense) and pay off the portfolio lender anyway. In both scenarios I've paid off the lender very early. I guess I don't see the value-add for the portfolio lenders with buy-and-hold deals when the outcome is often the same for them as flip deals.

Just trying to learn. I assume there's a puzzle piece I'm missing.

Thanks for the recommendation @J Scott. I'll be contacting them. Sent you an e-mail.

@Chris Martin Thanks very much for the tip. @J Scott also mentioned the same technique in his one-on-one interview with Brandon, but I wasn't able to get to the right section of the site. This is perfect. Much appreciated.

Thanks @Upen Patel. I'll admit that you're the first person I've come across that has said portfolio loans aren't good for flips. Your logic is sound, but it's the first I've heard of it.

I get what you're saying about only being able to use portfolio lenders a few times for flips before being blacklisted, but surely there are alternatives to hard money for those of us with little experience, but with good credit and income...

@Chris Martin @J Scott

Sorry Chris, "BankA" was obviously a bad fictitious bank example. J's right.. it was meant to mean "any bank". Didn't mean to come up with something so close to BoA. I have software engineering background, so I guess that's bleeding through with my variable names. Thanks for your detailed response.

And thanks J. I'd hoped that portfolio lenders would typically offer similar loan products and it sounds like that's the case, for the most part. With little experience, I suppose I can expect their "starter package". Since you're local, I'd love to get some recommendations from you on some good portfolio lenders in the area. I'd be covering the down payment with private money. I believe you said in your one-on-one interview with Brandon that you may have found some nearby.

Also, J, check your colleague requests... look for the one that's too long. ;-)

Excellent post, Linval. Thanks very much. 

Hey Gabriel. Where did you end up hanging your license. Somewhere local?

Mornin' folks. Happy Christmas Eve, and Happy Holidays. Not a brand new member, but active now after leaving the account unused for a bit. I'm in Maryland. Catonsville, specifically.

Quick snapshot: I've spent the latter half of 2015 learning, by attending BP webinars, listening to podcasts, reading J Scott's flipping books, and occasionally posting questions. I feel like things are coming into much better focus for me now.

I'm interested in residential rehabs to start, moving into buy-and-hold a little later on. I've secured a private lender for the down payment on my first deal and am seeking out good portfolio lenders in the area. Also seeking: investor-friendly agent, investor-experienced GC, and investor-friendly brokerage (not right away).

Looking forward to hanging out with you crazy kids!

Thank you sir. So does your brokerage require you do ANY deals outside of ones you're doing for yourself? Any advice on how to find a small local firm that's investor-friendly?