All Forum Posts by: Mario Cuartas

@Brennan Crick Thank you for sharing from your personal experience. Have you ran into any challenges refinancing quickly (less than 6 months) after completing the project. I have contractor that usually requires 25% down and the rest at the completion of the project, so I will only need to have one draw if i play it correctly and am able to cover the initial 25%. Is that a smart way to do it, or would you recommend more frequent draws. Also, I imagine this varies by lender, but lets say construction takes longer than expected, do you have any idea for how long the draw period is open for - is it for the duration of the term or do they give you tight schedule timelines that it needs to be finished by?

@Ben Stoodley, Thank you. This is the first time I am hearing about the draw and inspection fees, so I am glad you mentioned it.

@Drew Sygit, Great information. Your posts outlines so many great tips. I appreciate you taking the time to respond. One quick question about the screening process, is it legal at all to require drug testing? Since you mentioned creating obstacles to eliminate applicants with entitlement attitudes, what other hurdles/obstacles would you put in place? Renter insurance? Tax returns?

@ Michael Kinsella, thank you. Does the work that the Hard Money lender pay for have to be performed by a licensed contractor? Or can I, as the owner, do some of the work and have them reimburse me directly? 

Also, since you work for a lender, is seasoning required before I am able to refinance out of a hard money? If so, is this mandated by laws and regulation, or is it more of a preference by each lender? The reason I ask, is that I would like to refinance as soon as construction is complete in order to limit the interest only payments to a minimum and move the asset to a conventional product, but want to know how much time to calculate in my hold projections. 

Thank you Jay. I understand the cash down and am ready to do that, I was mostly curious about the interest only monthly payments being done every month or accumulated for a lump sum payment at the end; it makes sense for them to be taken monthly as the risk is much greater to wait. 

When the rehab is financed, do hard money lenders (HML) escrow the rehab amount? Normally how are funds drawn? I imagine I would provide a rehab schedule separated out by phases, I would pay for the rehab for that phase, the HML would receive the invoice when complete, send an inspector to review the work, and then reimburse me for the rehab. Does this sound correct, or is there another way that the rehab is financed with Hard Money?

Hello Everyone, I am looking for some education on Hard Money. When I purchase a property with hard money, do I still have to wait for 6 months before I can refinance? Or is hard money considered the same as cash, so technically i can refinance when ever I want? Are there any hard money loans that do not require payment per month, but rather at the end when you sell the flip or when you refinance out? What are other aspects of hard money loans that I should watch out for? Also, has anybody ever used hard money lenders that advertise on Bigger Pockets? are there any recommendations for hard money or private money lenders in Missouri? 

@Matt Leber

Thank you. If I do buy in a low income area, I will definitely apply these suggestions.

@Rob Gillespie

Thank you Rob. I guess that sums it up, what is wrong with the property, repairs or cleanliness? I guess we can live with unclean apartments, it’s disrepair that leads to issues. $800 for a $25k investment is a great return, but how much of that would you say gets eaten up in maintenance and cap ex per year? Does it really come out to be better cash flow in the end, or do the expenses make numbers shake out like other investments purchased in class A to B neighborhoods?

@Melissia Larson

Thank you Melissa. It’s sounds like the pros outweigh the cons, and there are contingencies to mitigate the risk, as you mentioned by screening appropriately. What other tactics have you used to ensure you are managing there properties well?

@Dennis Wayne

Thanks Dennis. I appreciate your perspective. At what point does the line between letting them live in their own filth and evicting a tent to protect your investment get crossed? I mean there are units I have seen that have leaks, huge holes in the walls, even feces in the floor and infested with roaches. As a landlord, would you just allow the people to stay there even though long term they may be destroying your home? Do you evict and try to find someone new? Or do you just fix the issues let them live there and just continue to address problems as they come, and not worry about it. I guess for me, I would want to evict the tenant and find someone new. Would

Love to learn more because maybe I should not be thinking that way and I should just be chasing the cash flow and as long as the checks come maybe I should be okay with it?