All Forum Posts by: Mark Safrin

Leon, a Bridge Loan is basically a short term loan. In Real Estate it enables you to do what is needed in the short term such as purchase a property and or Rehab it and or flip it etc... The loan bridges your current needs until you can do what you need to do to pay off the loan. This is called an Exit Strategy.  Typical exit strategies include selling the property or refinancing to another lower cost loan. 

Hard Money Loans (the word Hard means the loan is backed by Hard assets - usually property) are usually bridge loans but have variants like Fix and Flip loans. 

Hard money bridge loans attract high interest rates and other costs. They are typically used to purchase investment housing when a) your income does not qualify you for a conventional loan b) the conventional lenders take too long to close for your deal and c) when you need rehab money added to the loan to rehab the property. There are other uses as well.

Usually the idea is to do what you need to do with the bridge loan money as fast as possible and then exit the loan.

Hope this helps.

I guess it depends on how you were planning on financing your investing activities. As a HML, I agree with Corey. If you came to me with a bad credit score (meaning < 600 Mid FICO) I would almost certainly only be able to lend you a considerably smaller percentage of LTV on a bridge loan for that amazing property you have under contract than if you had more credit. Further if you wanted to refi say long term with us, we need 650+.

One of my colleagues last week had a client who repaired her credit by 60 points in 3 days. We know because we hard-pulled her score before and after at her insistence. I don't know how she did it, possibly it involved threats of phoning whoever 12 times a day or perhaps hiring some guy called Vito (not sure which is worse), but apparently it can be done and she is now eligible for the refi.

Not much difference. Once again speaking as a HML. It's just a different exit strategy. The point about asset based loans is that we mainly look at the property rather than you.

Not much difference. Once again speaking as a HML. It's just a different exit strategy. The point about asset based loans is that we mainly look at the property rather than you.

Hi Pedro.

No expertise here, neither with renting or the area and it may have nothing to do with the real issues, but the pics give me the impression that no real landscaping was done. Just wondering if a manicured lawn might present better.

 Best wishes. 

Are you able to find owners that will finance as 2nd position lien loans?

If so find a HML who will allow a second position.

Then no problems with the downpayment.

Of course you are still going to need some cash and cash reserves for other things besides downpayments. 

For networking,  this one looks promising:

Chicago Meet Up - "Shark Tank" Deal Presentation https://www.meetup.com/Chicago-Real-Estate-Investo... #Meetup #Chicago via @Meetup

I personally intend to try it out next week.

Cheers.

To avoid needing a downpayment consider finding a very motivated seller who will agree to finance the said downpayment amount as a second lien position loan. Then you need a HML (like us) who will allow a second position.

Of course you are still going to need other funds. But as you say you are OK to have some skin in the game. For instance for any closing costs that cannot be rolled into the loan (e.g. appraisal), for rehabbing until the first draw, for loan carry costs until the property is stabilized (HMLs are not cheap) and of course reserves for a thousand things that might go pear shaped.

Best of luck in your BRRRR empire.

As HMLs we would look for you personally to preferably have a Mid FICO of 600+, pass a background check to make sure you are not on the run from police or selling crack on the weekends, be a US citizen or resident and the more experienced you are in flipping/rehabbing the better the loan terms might be.

The rest is dependent on the property in question.

The ARV is established by appraisal like LTV You will need to provide a Scope of Work for the appraiser to use. Using us as an example - we expect to close 3-4 business days after the appraisers leasurely grace us with their report. During this time Title should have been taken care of. We expect to close on a SFR in about 2 weeks or so. When all the stars miraculously align we can do it in about 9 business days.

Of course all this presume the borrower is also prompt and there are no delays. I could probably write a book already on ways that due diligence/underwriting/closing can be delayed.