All Forum Posts by: Michael Glist

Are you looking at properties that need to be fixed up then turned into rentals BRRRRs or just normal turn key properties that are ready to go?

For hard money yes. As long as you have the funds in the account we will typically not need them to be seasoned or care about the source. I know people will get a LOC for down payment all the time.

@Zackarias Aitchison & @Adam Lacey feel free to reach out and I can connect you guys with who I know in those areas. 

Welcome

I would say start with house hacking that will be the best way to start learning. 

As far as rental values go that part is pretty easy because you can see the home look up the neighborhood on zillow and boom you can see all the similar rentals and what they rent for so you can get an idea of what you will be able to rent for. 

I would also say remember to have and keep at least 6 months of PITI mortgage payments in an account for each property. Most people forget that as a landlord you are on the hook for whatever goes wrong, sink broken, garage door stops working, water heater goes out etc. And theres also the potential that a tenant moves out and leaves the house trashed and holes in walls thus not only costing you money to repair and clean up but puts your rental income on hold until its completed and rented out again.

My question is how much if any is the contractor getting. That is the only reason I can see as to why the numbers are so far apart in my opinion is because he needs to have enough extra to pay the contractor a finder fee or a cut as well. Otherwise if he brings the deal, you bring the lender and you both manage it I don't see why it wouldn't be a 50/50 deal or even a 60/40 deal on his end but a 90/10 split when you brought the lender and will be actively involved does not make sense to me. But again this is just my opinion. 

I know of a few I'd be happy to connect you.

The issues I see that you may run into are if you do not have experience in rentals lenders will likely require you to qualify for all the mortgages and will NOT count any of the rental income as usable income for qualifying for the loans. Most lenders want to see 2+ years experience as a landlord which they will prove via your tax returns to verify rental income and loss. 

A HML will be used for real estate, a business loan or alternative loan would be used for construction material and other business related expenses. 2 different loans and both have separate terms and guidelines.

A HML will be secured by using the Real Estate as the asset where as a business loan will use stuff like equipment accounts receivable or have it unsecured.

For construction companies they should be looking at a LOC, AR loan or something else business related. Even though they are part of the process to rehab the home a HML is not the loan for them.

Both Lima One and Lending One are great. Most if not all HMLs will require an LLC or corporation since it is a commercial loan and not a consumer loan to an individual.

Yes a lot of lenders will do XX amount down and fund 100% of the rehab and worst case scenario is that you need to pay down payment on both the purchase and rehab amount.