All Forum Posts by: Mark Safrin

I don't know the companies listed but here are some thoughts about 100% HML financing to take to heart:

1. Are they selling "training courses" or the like? What you need from a HML is money.

2. Have a look at the fine print. Make sure that your LLC owns the property. Not an LLC that you can be booted off the moment you don't make payment - losing all equity including all that rehab you sweated over in the property.

3. Have a look at all fees, points and interst rates. Getting charged 15% interest only and 5 points means they have made 5% from the start and that interest rate will bite very quickly. 

In the end no one gives something for nothing. Most of us HMLs want you to have skin in the game, to share the risk. Those that don't, even if they are honest, will protect themselves from or cover their risks one way or the other.

You could consider a 30 year fixed, fully amortized HML. They have the advantages of other HMLs but also the disadvantages - namely points and higher interest rates.

Ours for instance do not come with rehab money. If that's required then an obvious course to take is a short term bridge loan with rehab money. Once rehab is complete, refi with, for instance, the above 30 year fixed.

Best wishes.

 Thanks Marc.

 Well if you want to be within the comfort level of most of the HMLs I know of including us...

- Ask for decent a loan size. Some have a minimum of $75k for instance but $150k is usually good for most. $1M will probably never be turned away.

- Have a decent Mid FICO. 650 is good. 700 is even better

- If rehabbing, purchase a property with decent ARV compared to the property As Is value plus rehab. We like to lend you as much rehab as you need.

- Don't purchase too rural. That lonely mobile home in Outer Offthegridville might look like a good opportunity for a flip but many of us probably don't agree.

- Buy properties with lots of comps nearby if possible. That triplex, the only one sold for 3 years for 20 miles in all directions might be difficult to appraise.

- Many of us are uncomfortable with lending on commercial or mixed use property less than $500k.

Those are some that spring to mind.

Best wishes.

If you email me, I can probably point you to a devilishly handsome chap whose HML empire includes TX. :)

Using us as an example HML you need to:

- Be US citizen or resident, 

- Have a preferable credit score above 600 Mid FICO 

- Not be in foreclosure.

- Be able to pass a regular background check to make sure you are not on the run from Police or running a crack operation in your spare time.

- If you are fixing then you will need a scope of work.

That's it!. Looking at another answer here, I have to stress that You do NOT need to have any verified income. The "Hard" in Hard Money Loan means that the loan is secured on a Hard Asset - the property, and not dependent on your income.

If you are inexperienced then you will be eligible to less money lent for a particular property then we can give experienced rehabbers.

Hope this helps.

I have never been to it, but perhaps consider https://www.meetup.com/Chicago-South-Side-Real-Estate-Investing-Meetup/

Best of luck!

Searching for solution ideas here.

I have a client rehabber in Chicago who came to me halfway through a gut rehab fix and flip. Her previous contractor had grossly underestimated the scope of work, she fired him and is trying to finish it herself (She has rehabbed herself before).

-She owes $260k to her previous HML (Purchase was $213K).

- She has put $140K rehab in time and materials so far.

- Still needs $200K further rehab to finish.

Just had the the place appraised. The following values are not a typo:

- As is value: $239K  !

- ARV: $725K !

The disparity between As Is and ARV seems very strange. If this were a sale now at As Is Value there would be rehabbers shooting each other for the opportunity to stand in line to buy the place. ;)

We cannot lend her enough up front for her to pay off her current loan due to low As Is value. (Less % since she is refinancing).

Comps mid rehab are not so easy to find.  This is (now) a two story building, the comps the appraiser used were old (and looked it), single story homes that did not even have a lick of paint done to them when they were sold.

Suggestions welcome.

Any Hard Money Loan does not have income verification requirements. For a long term HML 30 year fixed, fully amortized for instance, (available on SFRs 1-4 units) there is DTI consideration on the property itself but no personal income is needed.

Of course the loans still need to be paid off and HMLs are more expensive than conventional loans but if the maths works then it's an option.

Best wishes.

Any Hard Money Loan does not have income verification requirements. For a long term HML 30 year fixed, fully amortized for instance, (available on SFRs 1-4 units) there is DTI consideration on the property itself but no personal income is needed.

Of course the loans still need to be paid off and HMLs are more expensive than conventional loans but if the maths works then it's an option.

Best wishes.