All Forum Posts by: Mark Safrin

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 Why not come to one of the Chicago RE meetups that features lots of networking time? 

A Hard Money Lender should have no problems lending to an entity. Most of our loans for instance are to an LLC (with a personal guarantor).

Cheers.

I'm also in Chicagoland and can probably make a suggestion for you. You are also welcome to come to our office and discuss your plans over a cup of tea. :)

Cheers.

What size loans were you considering? Also is a short time until closing needed?

Cheers

 Hi Linda,

A Hard Money Loan is going to be a loan against the equity of an investment (not your home) property. It will be the first lien loan against it. As such it will usually not be the downpayment but rather it will be the rest of the purchase besides the downpayment. You will usually have to get the downpayment from elsewhere.

So if you have in mind this great property for $100K, you can _maybe_ get a HML for $90k (presuming the property is really worthy ALOT more than you are paying for it). This means you need at least $10K for the downpayment from somewhere else and that somewhere else is not going to be a first position lien on this property. Perhaps you have an auntie who wants to fund you in starting your Real Estate Empire?

Oh yes, if there is rehab to be done the Hard Money Lender will also lend you up to 100% of the rehab money. This will be available in draws and refunded to you from escrow as you complete each milestone. 

However before you get too excited, you should know that you will still need some more of your own capital. Why?

Because you will need cash for:

- Loan closing costs of various types including points, appraisal, fees, title etc.. say ~$5k to $7k.

- Rehab money (if you are rehabbing) enough at least until the first draw.

- Servicing the loan (making monthly payments) until you stabilise the property (get renters in place) and refinance, or flip the property (sell it) and pay back the loan or whatever your exit strategy will be. HMLs have high interest rates and your monthly payments start at month 1 no matter how long your flip will take.

- Money for cost and time over-runs and emergencies.

- Dont forget that at the end of the day HMLs while convenient and are great for certain uses are nevertheless usually short term loans, are more expensive than conventional loans, and HAVE TO BE PAID BACK.

Best wishes.

 Alejandra.

Sure. As long as that personal loan is not a lien on the property, a Hard Money Lender does not care where the money for the deposit and various other expenses comes from.

Cheers.

Hi Shawn. I cannot answer your questions, I just wanted to wish you luck surfing up the learning curve.

Being an independent lending broker, if I understand you correctly, is not easy. You have to pander to the whims of both lenders and borrowers. We were there in the not at all dim distant past.

Eventually if you are good you will likely line up your own investors and loan clearing house or similar and become lenders with your own money to lend... Life becomes much easier.

You will find there are lenders with broker programs you can join. One such broker in our program just last week brought us a rock solid ~$30M deal. You can probably hear his heart pounding in anticipation along with his nail chewing due to worry from across the continent as we work through due process towards closing.

I can only suggest networking, networking and networking. Get to know the business and the players. I'm still very much learning and building a network myself though fortunately I joined after we finished being brokers.

Wishing you every success. 

Benjamin

Sure HML are a proven solution as numerous BP members here can attest but it needs to be part of a plan with a workable exit strategy. And without some creative financing you will need downpayment capital as well as for not insignificant other costs.

Wishing you much success.

Hi Dante,

Cannot spot the PM. The wonders of modern technology. :) As per my PM to you, consider emailing me. 

Kindest Regards