All Forum Posts by: Patrick Lorang

More to think about.... Thanks for the suggestions. My situation doesn't quite dovetail with them, however. I have always approached this particular property with the intention of buy&hold. With a stained glass window and other classic charms, and located in a phenomenally nice location/neighborhood, I have no intention of selling the house near-term, if I can obtain it. It's a keeper: a sound, long-term investment. The elderly owner also lives out of state. The house in question is not his primary residence, so the financial benefits you've outlined may not accrue to him. At any rate, his many children are insistent that he sell for cash and not do any form of owner contract. He's holding-out for the cash sale, and I certainly understand and respect his position. It'd be nice, from my vantage point, if he'd enter into an owner contract, but that doesn't seem to be in the cards.

@Bill Gulley, thank you for your post. Your advice appears wise, and your investing experience far beyond my own. I just read portions of your TIC posts, and will read more. I did try partnering with the seller a while back. However, he is quite elderly with health issues, and for that reason politely refused to work with me. He does need to sell ASAP and simply be done with the property. I appreciate your input. Being stubborn and persistent, though, I'll still forge ahead to see if there's some way I can purchase, renovate and preserve that house, without being financially reckless. My day job income is pretty good, so the 10% down I have now could be 20% in six months. But will the house still be available then? My buying the house is not a "Must Do." But it is a desire or preference, which keeps me looking for a way to realize my vision.

@Breynan Hammons,  thanks for your post. Regarding assets to leverage, I have my primary residence; though with little available equity, as I refinanced a few months back for $32K of its appraised $40K value. I also own a recreational parcel of 10 wooded acres adjoining National Forest in WA State. Its tax-assessed value is just over $16K, though market value is closer to $25K. Not super large assets, I realize; but it's all I presently have in terms of real estate value I could tap.

Since early-February 2016, have been trying to buy an historic Victorian home, built in 1890, in Palouse, WA. I've had the home inspected and know its issues. Fundamentally sound, it needs the works: replacement of plumbing, electric, re-roofing, etc. I can do about 2/3rds of the required work myself.

Agreed purchase price is $46K; tax-assessed value: $71,000. ARV: $100-120K. I can put 10% down, and cover appraisal and closing costs, but not a lot of "extras."

Have explored many HM lender options, yet most want 20% or more down, plus those extras: so many up-front fees that I'm knocked out of the running.

As of 8/7/16, my TransUnion FICO score is 771. I am committed to purchasing and bringing this unique house back to quality-living and conventional-financing standards. I just need about 1 year to do it, and a partner to trust that I'll make every scheduled payment on time, across that period. 

Again, I offer 10% down on the purchase price. Interest-only loan OK for one year, at a percentage rate that would make it worth it for you. I will make good on the loan and can provide many personal references.

In way of background, I am a member of the Whitman County Historical Society and a board officer of White Spring Ranch Museum, near Genesee, ID. I know older houses, their special needs, and am highly motivated to see this particular real estate project through to completion.

Please contact me if you have cash to lend and this particular project genuinely interests you. Thanks for your consideration.

@Michael Kowal, I may have missed something. Can you please explain further how credit lines could take the place of a HM loan? I just opened a $10K line of credit, at 6% interest, with a monthly minimum payment of 5% of the outstanding balance. If I maxed-out this credit line, the monthly payment would be $500, and I'd only have $10K to direct to a home's purchase. If the house being bought cost $40,000, I'd have to open and use a total of 4 comparable credit lines, which would have me paying $2,000/month for a $40K (likely 'fixer') property. That'd be vastly more expensive than a typical HM lending arrangement, as I understand things. Again, I probably missed something. Are you speaking of credit lines in the 10's of thousands of dollars, with very low minimum payments? I have very good credit, but I don't see such high credit lines being available to myself. I am in the process of trying to buy a fixer house, and see a HM loan as my only realistic avenue to purchase. My line of credit may help me meet origination or closing costs, and perhaps some repairs, but little more. This LOC, too, represents expensive money: certainly not enough -- or a practical approach -- to purchase a home outright.

@Aaron Miley thank you for the Inland Capital plug. This also is one of the HM lenders I've heard good things about.

Matt, thanks for the lead. Veristone Capital is one of the 4 HM lenders I've had recommended to me as being effective and ethical. Good to have additional confirmation.

Nyala, thanks for sharing your experience in such detail. Your writing is excellent, and your story inspiring and educational. I certainly find value in it, being a newbie, and will be applying what I've learned from your post. Thanks again! Good luck with the development of your real estate business.

For the past several weeks, as a new member of Bigger Pockets, I've been looking into Hard Money lenders in my effort to find financing for purchase of a fixer house, near my present home in eastern Washington State. I have found four companies which appear reputable, though I am "green" to HM lending and apprehensive about being swindled, one way or another. Can any fellow BP members give me recommendations for ethical HM lenders -- either national or regional -- who could finance a "buy-&-hold" property in my state? The house needs plumbing & electrical replacement, re-roofing and various other improvements, though it is fundamentally sound. I am capable of doing most of the required work, myself, but will need time to do it: preferably, at least 12 months. I can put 10% down on the $48K purchase price, though it looks like most HM lenders are requiring 20% down. The ARV will be within the range of $100K-120K. My intention is to keep the house as a rental, in a consistently strong rental market serving 2 college universities and local industry. I have a good FICO score in the mid-700's, and am skilled in basic carpentry, plumbing and electrical work. I just can't bring myself to pay contractors for work I can do myself, which is why HM appeals to me. A conventional loan would tie my hands and compel me to farm-out most repairs and upgrades to professionals, putting the final cost of the house out of my reach. Any recommendations for specific HM lenders would be greatly appreciated. Also, advice as to what I should look for in HM financing, and what pitfalls to watch-out for. I expect to have an accepted purchase & sale agreement in place within the next few days, likely affording about a month's time in which to secure financing. Thanks in advance for any guidance the BP community may be able to provide.

@Dwayne George Believe it or not, I am still in the process of attempting to buy this house. My personal home re-fi took a while but went through fine, allowing me to pay off debts and greatly increase disposable monthly income. I also sold a motor home, giving me some cash towards down payment, and opened-up a $10K LOC with my credit union, which I really don't want to dip into, unless absolutely necessary. Now in the process of getting another purchase agreement in place. I let the original agreement lapse after three renewals, due to initial difficulty in getting the finances together. There have been other offers on the house in the meantime, but the seller is stubborn and has refused them. He won't come down in price; holding firm at $48K. I expect to get the house under contract again shortly, and have some HM lenders in mind to approach with the deal then. So far, they all seem to require 20% down, but if I can find, or persuade, a lender to accept 10% down, I'll have a green light for this project. Before taking final action, though, I am making a thorough cost estimate of repairs/upgrades needed, just to be sure of the scope of the project ahead. Renting the house should not be a problem. The house is in a very popular small town, 15 miles equidistant from the region's two main population centers with college universities. The region's well-established top employer, for whom I work, is going great-guns and has opened 40 new positions. The pressure on current housing is intense, and the local real estate market has exploded, with too few houses on the market to satisfy demand. It's a good time to be a seller or a landlord, so I am not concerned about finding tenants when the house is ready to rent. I'm still hoping to find that HM lender with a solid reputation and some wiggle room on the down payment; will keep looking. Thanks for your inquiry.