All Forum Posts by: George Despotopoulos

What are the unique needs of new investors in the fix & flip market? 

There are bridge & DSCR lenders that can finance a non-warrantable condo. You don't need a mortgage broker, just a reputable, competent direct lender that will ask the important questions upfront to properly screen your deal. Unfortunately, not many around like that...The appraisal is about $150-$200 higher than standard cost because they likely went through an appraisal management company ("AMC") to get the appraisal ordered/assigned. The AMC charges a fee on top of the appraisers. Condo's are usually on the cheaper end of cost for appraisal reports, typically not $750 (but if it's a high end condo or in an area with there's some complexity, the fee can reflect that).

Néstor Orlando Pimentel Solorio

You do not need an LLC with history, nor experience, to qualify for a hard money loan. You can borrower through a reno bridge loan and then refinance into a 30 year loan if you intend to hold as a rental. The most important factors a hard money lender will look at, if you don't have experience, is your liquidity and credit score & history (as well as your background -- no liens, judgements, foreclosures, bankruptcies, etc).

I would hit up @Michael Cid -- he's a tremendous resource and is a direct lender. 

@Pat Leri 

If there's a direct lender that's quoting you terms that work, that may be the route to take. There are lenders that can qualify you based on the income shown to date, even if it's less than 12 months. You'll want to discuss that with the lender upfront. There are lenders that can use 3rd party reports to validate your projection of STR income and use that for the purposes of calculating the DSCR and 70 LTV would be do-able even if the DSCR is below a 1.2.

I would reach out to [email protected] to see what he can offer. 

@Michael Cid

@Michael Cid@Michael Cid

@Bob Willis PadSplit is a little tricky. Unless I'm mistaken, the contract between owner/landlord and PadSplit doesn't have a defined monthly rent but a target/goal of monthly income (so it's hard to use that as lease). Also, many PadSplit properties have bedrooms that are created via flex walls that wouldn't meet the definition of a bedroom in an appraisal, so many PadSplit owners may think their property is worth a certain a mount based on a bed count that's not valid. 

Nonetheless, you can base the DSCR calculation on PadSplit rent (if there's a history of PadSplit income being produced) or short-mid-term market rent (an analysis done at the same time of appraisal). Not a lot of our competitors offer this but it's something we can consider (but for us, it can't be in a rural area, the loan amount must exceed $150k, if we're using PadSplit income (or STR/MTR income) the max LTV is 75% and the down payment must come from your own funds).

There are pros & cons of both and a bit depends on certain facts that we don't have (mostly around your profile as a borrower (what's your credit score, liquidity, etc) and the asset (when did you buy it, how many units is it, what's the cash-flow look like, etc). Do you qualify for a HELOC? What do the terms look like? Also the same goes for a cash-out refi against the property. To get a better idea, it's prob best to get a quote for each type of loan.

 Are there good guys in the industry that are transparent and have great communication?! I think so...but I may be biased, so to remove that bias, I'd suggest going to the Hard Money Lender Directory. Here's a link: https://www.biggerpockets.com/... If you're on the homepage and you refresh it, you'll see some lenders that are featured. You can also search by state. There are some lenders with a ton of reviews/feedback from BiggerPockets users. I wouldn't stop there. Check out google reviews, trustpilot, etc.. Then if that lender looks good based on these reviews, they should be able to pick-up the phone, so give them a call and gauge their level of competency/communication. Compare that to the others you've spoken to. 

I'm also going to disagree with suggestions of local lenders > nationwide lenders, I think those are self-serving. There are nationwide lenders that know your market just as well as a local HML but honestly they don't need to. It's just like having a lender that is a real estate investor themselves. That's all great. Sure they know your perspective. But having an expert or industry leader on/in the debt space is much more important. Same goes with local vs nationwide. If a nationwide lender has a solid process, communicates requirements, reviews the scenario in-depth and thinks ahead of any issues then it's just about going through the steps.

@Anne-Marie Tustin it was a pleasure working with you! Looking forward to the next one!

Hard money is around 10.5% - 12.5% right now at like 80-85% of purchase price + 100% of rehab  on a 12 month term with no prepayment penalty. It's driven mostly by credit, experience, and the deal. I think it's important to not look at reviews and what's being said about any particular lender in forums like this. It's also important to see how in-depth or how much of a review a lender does before quoting you terms. 

Hi Andrew, if you look at the top of the BiggerPocket's page, you'll see the NETWORK tab. From there you can go to the Hard Money Lenders section and search by the state your property is in. Most of them have reviews you can read through. Another tip, just search in google the particular hard money lender's name + biggerpockets -- that'll bring up forum posts on that lender.