All Forum Posts by: Mitch Kobernick

Hello all!

I wanted to ask if the following fees seem in line for a Hard Money Loan:  

$700 at time of application submission for SOW Review, Renovation Cost Validation and an Appraisal.

$175 Draw Schedule Review

$235 Document Processing

$350 Lenders Attorney

I've only used HM once before on a flip I did in 2005 in Massachusetts.  I now live near Baltimore and I'm not sure if this is common for this area.

Thanks!

Hey all - Looking for some friendly advice. About to sign on offer letter on a small multi-family investment property in New Jersey.

I have explored the use of a 50/50 partnership with a good friend of mine who will live in the property and manage it for us. Although I will put up most of the down payment, he will be in charge of managing the property and doing some of the rehabbing. We have set up a payment plan for him to pay me back his portion of down payment and have outlined all responsibilities. 

When it comes to financing, here is where I have a dilemma. Currently, I am personally pre-qualified for a loan through a conventional bank based on my personal net worth and income.  However for a partnership, my options as I understand them from my research are:

1. Setup an LLC with both of us as 50/50 partners. Work with my mortgage broker to either secure the loan under the LLC to start (with my personal income as guarantee) or secure the loan under my name first and transfer deed at a later date (running the risk of "due at sale" clause)

2. Secure the loan under my name; Work up a partnership agreement that splits the expenses and income in the 50/50 arrangement

3. Secure the loan under both of our names. Work up a partnership agreement that splits the expenses and income in the 50/50 arrangement

I prefer #1 but not sure if I can pull it off. Will be talking to my mortgage broker later today...

Any thoughts on this much appreciated!! How do others typically set up partnerships and loans?

Thanks

Nick

Have you ever considered doing balloon interest payments made as a lump sum at the end of the loan?

 Yes, the hard money lender said that they would set up things as a line of credit broken up into 3 phases. Each phase is a 3rd of what i qualify for. If i dont use it all then i wont be charged. I would have to show receipts for everything. I really need more options. I think i may need a partner.

What about inspections and draw fees? Are you working with a conventional lender for backing out of the HML? For pre-approval do I have to walk into the office to fill out an application or is there a online version?

@Mitch Kobernick  Quick questions.  

What is the qualification to be a deemed an investor on a no doc loan?

The 12-14% and the pt spread when are they due?

Hypothetically:

$150K ARV

3/2 Texas, 3/1.5 in Tampa.

Using your numbers on the ARV it would cost me a lil over $122K at the outset. Closing costs and holding costs are additional. Do you have pre pay penalties? I may make $2,500 in 6 months on the property, or you get a property with $45K in equity, a lil over 40% without your cost and fees?

If my numbers are correct, or close to being correct,  I don't see an issue.  As long as your model encompasses multiple properties and is a true no doc scenario.  I'll take $2,500 x 100 in 6 months or 50 in 6 months or less.  

Have the properties, several known public marketplaces to market in, just need the keystone to build upon.  Folks in some of the market places I visit, flat out will say, " the money ain't the issue,  what you bring to the table is."

Personally, I don't stop until the title search returns as marketable.

Of course there are situations where the seller guarantees title insurance.  Which is a beyond me.

@Mitch Kobernick

Like most investors, I'm always interested in adding private and hard money lenders to my
@Mitch Kobernickrolodex. 

1.   Are you a broker, facilitator, etc. or lending your own funds?

2.   What additional fees are associated (appraisal, funding fee, inspection, draw fees, etc.)

3.   Is there an application or other fee that is paid in advance of funding? 

4.   How long have you / your company been in business here in Texas? 

@Mitch Kobernick in what states are the loans available in?

I would be interested in hearing about your tampa market funding.

Is this Texas only. I'll be in Virignia by end of summer and will be looking for funding on flips.