All Forum Posts by: Mark Safrin

If it is over 575 we can help 

Bob,

What is you credit score? 

We may be able to lend to you.

Sam, there are some private lenders such as ourselves who offer a 30 year fixed, fully amortized mortagage loan.  

Being private lenders, we and others who offer this product are not bound by the 10 properties max. 

While interest rates have gone considerably lower over the last year (our best long term rates for the very perfect loan, and very perfect borrower are currently 5.385% for instance,  but most borrowers are in the 6% range), it still does not compete with conventional loans. You trade price for flexibility. 

Best wishes on your way to investment property tycoonhood.

Well there is also a couple of points at closing... and the credit score has to be reasonable. We also don't lend more than 80% LTV etc... so we cover our risk.

We don't compete against conventional lenders, so of course our interest rates tend to be higher. Having said that, rates have decreased recently so we are currently offering 5.99% for the absolutely perfect loan and borrower. Most of my long term loans recently tend to be in the mid 6s to low 7s fully amortized.

Indeed. Our long terms loans are not a "No Money Down" strategy unless it's indirect such as a motivated seller second (we allow a second lien position to our first).

It depends on the loan. There are a few private lenders such as us who offer 30 year, fixed, fully amortized loans. For those who are not eligible for, or don't want to use conventional mortgage lenders its a popular choice. The numbers just have to work.

As a private lender we have most of our business come through brokers so we have quite a list of them. I deal with loan brokers every day. 

The standard fee for a broker that we deal with is 1 point - ie 1% of total loan size, paid at closing. It is all known in advance and the brokers' name goes on the HUD.

If the broker also charges a fee to the borrower on the side, then that is of course between them and the borrower, but from what I can see, most do not.

PS.  The loan terms you agree to are usually with the lender, not the broker. 

So... now that the note period is up there is a balloon payment due?

 Pamela, you really should inquire of the lenders in question. 

As I understand it from your question...

Yes you are apparently being offered 90% of purchase. There could be other caps as well however (LTV, RTV).

In which case, you would need $6K down plus closing costs!

If the total loan size is $100K for purchase and rehab (don't forget you will also need to factor in loan costs - where are these coming from?) then 10% interest-only is $10K per year or ~$833/month. When you exit the loan you still owe the original $100K.

But really you need to sit down and chat with the lender. Topics to chat about and preferably receive in writing include:

- Total loans size

- Fees and points and other costs both up front and at closing (and even sometimes at loan exit)

- Their Minimum loan size criteria

- Their property type and location criteria.

- Is the rehab paid in arrears at each milestone or up front?

Wishing you every success.

PS. Noting another poster's words in this thread, let me add:

1. Yes, there are indeed private money lenders who usually sell their notes within a week or so of closing. That is what, for instance, note clearing houses and note buyers are for.  Churning the money quickly back into more loans can be a smart business model.

2. I have been approached multiple times by wealthy investors through BP wanting to either invest in us as previously stated, buy our notes, or to directly fund otherwise excellent loans/borrowers who don't meet our loan criteria for some technicality.  I of course pass such inquiries to our managing partners - but so far I'm not aware of a single such inquiry with whom we have not ended up doing business. So whatever the agreements that were made, the investors are happy.

Best wishes in your investing career.