All Forum Posts by: George Despotopoulos

If you're just looking for a quote, here's a great starting off point when contacting a hard money lender:

• Property Address:
• Property Type/Number of Units:
• Square Footage:
• Purchase Price:
• Rehab Budget:
  Estimated ARV:
• Exit Strategy:
• Estimated Credit Score:
• Source of Downpayment:
• Liquidity: 
• Number of flips in the last 3 years:
• Number of rehab & hold deals in the last 3 years:

@Joshua Joseph there are plenty of DSCR lenders that would take you out if the property is appraising for $120k. DSCR lenders look @ the property's income instead of your DTI. Rates will depend on a variety of factors like property type, loan amount, cash-flow, your credit score, etc. They also lend to your LLC without issue. At $85k debt, as long as the DSCR > 1.1, you should be able to go up to 80% LTV on rate/term or 75% LTV on cash-out. The LTV will depend heavily on where your credit is though. If you're 680+ then those leverage ratios should be in play. Happy to provide any further info/feedback.

Hey @Mark Delosreyes -- it may be beneficial to look into working with a non-bank direct lender that focuses in/on investment properties only. The benefit is that the process is much quicker and you're able to borrower through an entity. The rates may be slightly higher but with GSEs limiting the acquisition of loans secured by second homes and investment properties to 7% of their volume and increasing rates, non-banks are much more competitive at the moment. You can also get debt on a 30 yr fixed. 

@Mathieu Baker -- there are non-bank lenders that can do 75% LTV cash-outs @ the 3 month mark. Rates are in the 4.875% - 5.875% range for most on a 30 year fixed, with a 3-5 year prepayment penalty. I don't work in the traditional financing space, but of course realize that terms offered there are a bit more attractive. But with banks tightening up on what they can/will do w/ investment property financing & rates seemingly on the way up, it's good to talk to a non-bank lender (can be referred to as a private lender as well, typically some people call a private lender someone who does short-term financing in their direct market) and get a quote. If the DSCR is strong at the LTV & rate you're seeing from the non-bank lender, then it may be worth it to get cash now (at what may be a lower rate from 3-6 months down the line) and have the liquidity to pursue any other deals. While rates rising are problematic and could add to your FOMO, I think more opportunities will be popping up while that happens and having cash on hand will be beneficial.

Hey @Carol Scott - congrats on getting a property under contract, that alone in this market is a feat. Are you strictly looking for a private individual lending their capital? If not, then hard money or bridge lenders may be a great option. It depends on what your purchase price, experience, credit, and liquidity look like. Most hard money lenders (sometimes referred to as private money lenders but again that should usually be reserved for individuals lending their own personal money) will require 10% - 20% down and have a minimum loan amount of $75k - $100k. Typically, the minimum credit score is 600 but some, since the pandemic, raised that to 620+. Rates with hard money now should be around 8% - 10%. 

I don't have any contact in the DC as far as private money go but happy to help when it comes to bridge/hard money. 

We lend everywhere except for CA, AZ, NV, OR, MN, SD, ND, UT, ID, and VT. We typically stay away from "rural" areas unless there are 3-5 comps within a 1 mile. 

@Ginger Brown - we look @ a variety of things, most importantly: credit history/score, liquid assets/reserves, source of down-payment, the property & deal's numbers, and experience. Private lenders (individuals lending their personal funds) have less requirements. 

Your credit score & experience will affect the leverage you're getting. If you're new to flips or rehabbing a rental, expect somewhere between 75% - 80% of purchase & 100% of rehab costs as long as that total loan amount is at or below 65% ARV. If you have some experience, then that may be bumped up by 5% - 10%, so 85% - 90% of purchase price & 100% of rehab, at 70% - 75% ARV.

The as-is value & ARV will be established in the appraisal or interior broker's price opinion --whichever the lender requires. It's a sales comp approach, so I would pull some comps w/in a mile of the subject property for both the as-is & ARV. It would be helpful to send those to your HML but not required as ultimately the valuation report will be what's relied on.

@Jennifer T. awesome to hear! Pleasure working with you as well! 

But, the process w/ a non-qm lender can be as painful as working with a bank (if not more given the expectation that it's a quicker/easier underwrite). 

Non-bank, "private," lenders are a very good option now for any individual that doesn't show strong income but is liquid. Most 30 yr non-bank dscr lenders can offer competitive rates & terms -- of course, they'll be slightly higher than what a bank or non-qm lender can do, but typically it's actually an easier process and you'll close in ~3 weeks. Rates are in the 4.75% - 5.875% for most presently (on a 30 yr fixed). 

Hey @Daniel Eden you should work w/ a HML that provides you with a closing cost estimate upfront and use that to compare @ settlement. You should also seek out one that does not charge a prepayment penalty, especially if it's a 6-12 month term. If there's no prepayment penalty, then you don't have to worry about how quickly you can refinance out of it. There are HML that also offer 30 year term loans. Many will go up to 80% LTV on rate/term and have no seasoning requirements and there are also lenders than can do a 75% LTV cash-out @ the 3 month mark.