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All Forum Posts by: Chris Ellis

Chris Ellis has started 3 posts and replied 96 times.

Post: Hard money loan fund

Chris EllisPosted
  • Lender
  • Scottsdale, AZ
  • Posts 106
  • Votes 75

Why not assume more control with your money and more profits by doing deals on your own?

Post: Unique Situation While Flipping First Home

Chris EllisPosted
  • Lender
  • Scottsdale, AZ
  • Posts 106
  • Votes 75

I believe the greatest security you could put in place would be to take a 2nd position lien on the property behind the bank her financing is coming from. This way in the worst case scenario you would at least receive any returns before her. Depends on the ultimate fire sale price though from the bank. You may end up getting nothing in worst case scenario. Pretty risky. 

If you are looking at a bridge loan then 8% to 10% does seem pretty accurate when you are bringing experience. When it is converted into a long term loan or when you structure it upfront as a long term you can obtain lower rates. 

The other question to consider is down payment amount requested. If you have experience like you mention, I may be able to get it to 90% LTV and 100% rehab on fix and flips. Then as high as 85% on LTC for new construction.

I'm pretty sure those other companies you mention will ask for your tax returns though. Definitely chase those down if you can. 

Post: Is it worth getting a loan for properties under 100k?

Chris EllisPosted
  • Lender
  • Scottsdale, AZ
  • Posts 106
  • Votes 75

Yes. As long as the terms make since. This allows you to turn one property into potentially 5 by only utilizing 20% as a down payment on the property of your current cash as an example. I think most can agree the potential for return on 5 properties as opposed to 1 is much greater. It also leaves a reserve for potential mishaps in renovation. 

If you have no cash, what can you really do next?

Is the money already in the business account for the down payment? If so, the best thing to do is to let it season for over 30 to 60 days. 

A clear operating agreement will also need to be structured for the LLC and since I read the goal being that the relative is not to sign on the loan, they need to be kept at less than a 20% partner.

You will have to go private money I believe on this one. Wish you the best of luck on your hunt. 

Post: I want to fix and flip

Chris EllisPosted
  • Lender
  • Scottsdale, AZ
  • Posts 106
  • Votes 75

Your friends are accurate that you are ahead because of your savings. In most cases, on your first fix and flip you should expect to have to bring around 20% as a down payment on the purchase. Then 100% of rehab could be covered. There are certainly a few things to set up but I would be happy to have a discussion if you'd like to connect. 

Post: Question regarding investment loans

Chris EllisPosted
  • Lender
  • Scottsdale, AZ
  • Posts 106
  • Votes 75

Private money will always be more expensive than traditional. There is more flexibility with down payments and certain items but they are not stupid people and the rates will be higher. There is a lot more risk for them and their asset portfolio than there is with a large bank considered in some instances "too big to fail." 

Post: 2nd mortgage question

Chris EllisPosted
  • Lender
  • Scottsdale, AZ
  • Posts 106
  • Votes 75

I imagine the loan amount is what is causing you initial stumbling blocks. $50K is the minimum criteria on the lower side with most lenders. You need to find a lender that will do smaller deals. Check their minimum criteria. This is most likely the reason for no advice or response from a company.

Post: What would you do with 50k?

Chris EllisPosted
  • Lender
  • Scottsdale, AZ
  • Posts 106
  • Votes 75

Do you have construction experience? There are a lot of costs that can be overlooked just starting out. There are plenty of contractors out there wetting their beaks to hear your news of capital injection available. Perhaps forming a partnership with the right person can help alleviate some of those nerves and eliminate some of your risk. 

Post: Construction loan extensions

Chris EllisPosted
  • Lender
  • Scottsdale, AZ
  • Posts 106
  • Votes 75

A lot of lenders, even private, will allow you to extend it for another 12 months. Reach out to who you used is the first place to start. Otherwise go private and get a new bridge loan till you finish up what you are doing. I'll be happy to help if you need it.