All Forum Posts by: Mark Safrin

No. It is a non refundable payment. (Though in the unlikely event that a deal does not close we will credit it to a future loan). The money is for the honour of my underwritering team beginning the underwriting process on your loan.

*Takes a deep breath before stepping on the soap box*

We did not used to take such a fee and found we were inundated with tire kickers. The suggestion (elsewhere on BP) that borrowers paying for an appraisal shows sufficient good faith also has sadly not proven true. So now if people want their loan to go before my underwriting team they can have skin in the game or go elsewhere.

For our business model we have found the majority of our business is through mortgage brokers. They have seen us repeatedly service their clients and are happy to assure new clients that we are legit. 

I can also tell you a whole litany of instances where the borrower was found, last moment, to have lied on their application form, or for instance a few weeks ago even one that went AWOL on closing day and didn't bother to communicate for two weeks (A $10M deal and even with an upfront payment BTW). We want the borrower to have skin in the game! Otherwise there are other places to go to.

Best wished in your RE endeavours.

Yes. We do for instance. It helps sort the chaff from the wheat.

What we also have is a cadre of happy past borrowers who are willing to take a phone call and vouche for us and describe how their loan process went.

Most HMLs will have a minimum loan amounts of roughly $75K. Some have higher amounts.

HMLs will want you to have skin in the game. $10K is a good start, but depending on the lender (and your credit and experience) you will likely need to have between 10% and 35% down. And that's money down, not including loan closing costs.

By the time you have brought to closing: Lender fees, points, Title fees and pro-rata interest payment until the end of the month, then depending on the size of the loan you are probably looking at, extremely roughly ~$7K+ in closing costs alone.

Best wishes on your endeavors.

You are a Real Estate Investor.
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Asset Based - NO Tax returns and NO Income verification necessary

Fix and Flip, Bridge and Rehab Loans

• Up to 90% of Purchase capped at 75% LTV for SFR up to 4 units
• Up to 75% of Purchase for Multi Family 5+
• 100% of the Rehab costs
• No Pre-Payment Penalties
• Interest only Rates between 8.50-10.89%
• Close in as little as 12 business days
• 2 points at close
• We allow a second position
• Focusing on: NY NJ PA LA TX RI FL MD IL GA DC CT

Long term Purchase and Refinances of SFR up to 4 units

• 30 years fixed
• Up to 85% of Purchase capped at 80% LTV
• 65% - 80% of LTV for cash out refinances
• 3,2,1 Pre-Payment Penalty
• Fully amortized rates between 6.75%-7.75%
• Close in as little as 12 business days
• 2 points at close
• All States

Brokers Welcome

Call Benjamin. (847) 915-1158

We work with new investors all the time. For Newbies I generally lower the percentage of LTV I can lend slightly.

Looking at your post... One good, general bit of advice though that I received in the RE  business that I always try and follow - ALWAYS be prepared to pass up on a deal. ;)

Best wishes

@Jordan Alquran If you can possibly take a bank loan that can close fast enough for this purchase then you should strongly consider it. HMLs being comparably expensive are for when conventional loans are not available or are not suitable for the project.

However you will find that HMLs do not, generally, lend a loan of less than $75K. Some have much higher minimum loan sizes. This is because the HML overheads do not allow sufficient profit on small loans. If you do find a HML willing to lend on such a small loan, make sure they are legit and be prepared to pay an impressive amount in points and fees.

Best wishes.

Hi @Charlene Stovin.

People take out HMLs to purchase, rehab or refinance. Carrying a short term HML loan is generally expensive - e.g. the interest rates might be 10%+ interest only, so it's like a cold shower, you get in and do what you need to do as soon as possible and then get out.

When you get into a short term HML you need an exit strategy. E.g. fix the property and refinance or sell the property and pay off the loan.

Refinancing usually means a conventional loan. E.g. a bank. Banks offer much better interest rates than HMLs. However a Bank might not lend to you for a purchase or might not do rehab or the property might not quality or they might take too long to close for that purchase you are contemplating. That is why many people use HMLs to do what they need to do and then refinance at a better rate once they can.

There are also some Hard Money Lenders such as ourselves who offer refinance into our 30 year, fixed, fully amortized HML. However while the interest rates are less than a short term, hard money loan, it is still more expensive than a bank and indeed does not pretend to compete with conventional loans.

If you don't have 20% down then my guess is that you are not ready for a HML. HML is convenient but not cheap. You will still need a down-payment (probably 10%-35% of the purchase), you will still need loan closing costs (say $6K-8K), you will still need money to carry the loan until you can exit the loan, you may still need money to rehab (at least to the first draw milestone) if you are rehabbing and you still need money for contingency in case things not quite as planned.

Hope this helps.

If both you and the project you have in mind qualify for conventional or near conventional loans then that will be the cheapest option. If the numbers and closing speed etc.. all work out.

Someone here mentioned that for a HML you only need 10% down. Often this is true provided that the As Is value is considerably higher than the purchase price. Otherwise, depending on the lenders criteria, your loan might be capped at a percentage of As-Is value. Oh and dont forget you will ALSO need to pay loan closing costs. Typically $6-8K for a smallish HM loan. Plus often you need to pay the first portion of the Rehab untill the first milestone if the Rehab is paid in arrears. Plus extra cash in case of cost/time over-runs. Not to mention loan carrying costs while you work your rehab magic and then attempt your exit strategy.

As to what happens if you cannot get conventional loan refinancing as your exit strategy? Have a plan B. We for instance offer a 30 year fixed, fully amortized loan for purchases or refinances - but it is still Hard Money. For some people the numbers work out nicely. But having a bank or equivilant as plan A does seem wise.

Best of luck with your BRRRR.

Just thinking out loud here... there is a whole note buying industry out there. Some of our loans for instance end up sold on a public clearing house (Happy to give you its name privately). I've never been a note buyer but perhaps you can see who originates the notes you like and approach them directly for future direct investments. Can note buyers here on BP tell me if the notes they purchase include who the originator was?

I've had more than one potential investor like yourself notice me here on BP and then contact me by phone. Actually they tried to extract pertinent information like what we can offer such investors. I of course always take the Seargent Schultz approach (I know nothing, nuuussing!) and plead that I'm just a humble loan originator, before passing them up to a company partner for a chat. 

Best of luck in your endeavors. 

Beat the guesswork. For a SFR 1-4 forget about wasting time making a presentation. Just contact the lender, have a (short?) chat on what they can offer and the loan process and give a few bare details about the property type and location, loan type and amount, your credit score and how many properties you have done before. If you like what you hear ask them to send you a Loan Application Form.

So many times I'm approached with a deluge of info, pics and docs that I don't need. All too often these same folks are the ones that I jokingly threaten to send to my remedial form-filling class. It's just 4 simple pages for Heavens sake.

As a HML loan originator I'm mainly interested in knowing if you, the property and loan requirements match our loan criteria. Round pegs in round holes. Don't worry, there is a field near the end of our application form for you to wax lyrical about how amazing this opprtunity in Dallas is if you like. :)

Best of luck in your endeavors.