All Forum Posts by: Patrick Roberts
Patrick Roberts has started 4 posts and replied 1085 times.
Post: Looking for options on buying a first home with low down payment.
#2 Creative Real Estate Financing ContributorPosted - Lender
- Charleston, SC
- Posts 1,116
- Votes 939
If you have good credit, HomeReady/HomePossible are excellent programs, requiring only 3% down will still offering low MI rates.
Most states and some local counties/cities have downpayment assistance programs (DPAs), and a lot of larger lending shops have private DPA programs as well. These can be expensive and many programs have recapture/claw back provisions, so make sure you understand the program well before committing.
FHA is another solid option.
Post: Solo private lending startup, seeking constructive feedback
#2 Creative Real Estate Financing ContributorPosted - Lender
- Charleston, SC
- Posts 1,116
- Votes 939
Quote from @Steve Balinski:
Quote from @Deborah Wodell:
Really enjoyed reading your post — sounds like you're being thoughtful and doing your homework, which is huge.
I’m a private lender and broker myself, and honestly, your conservative approach (entity-only, 1st liens, solid underwriting, etc.) is exactly the kind of foundation that sets you up for long-term success. Most of the lessons you’re anticipating—like managing idle capital or balancing reputation with limited funds—are spot on.
For liquidity, I’d look into high-yield business savings or money market accounts with same-day transfer capabilities. A few online banks are great for this. As for reputation while working with a smaller capital pool, transparency helps a lot—position yourself as a relationship-based boutique lender who funds quality over quantity. That actually appeals to many investors.
When it comes to reviewing deals, here’s what’s helped me:
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Start simple: I ask for the basics upfront — purchase price, rehab budget, ARV, and timeline. I want to see how they got their numbers (comps, scope of work, etc.) to see if they've done the homework or are guessing.
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Borrower & exit plan: I pay close attention to the borrower's experience and how they plan to exit. Even if they’re newer, if they’ve got a solid contractor, agent, and some skin in the game, I’ll consider it.
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Keep it within your LTV comfort zone: I personally don't go above 65–70% of ARV. If it's a heavy rehab or a tight deal, I either pass or structure it with a smaller draw to start.
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Protect your downside: Get yourself on the insurance, confirm the entity setup, and don’t skip verifying basic things like ownership and reserves. Your instincts will get sharper with every deal you look at.
You'll definitely learn a ton just by walking through a few deals. Trust your gut — if something feels off, it usually is. And don't rush into funding something just because the borrower’s in a hurry
Also — I highly recommend getting plugged into your local investor community. Even just one good private lender or investor in your area can be a huge resource (or even a future partner). People are often more open to teaming up than you’d expect.
Question about this comment, i can't wrap my head around this. We put the protection in place so we can recover our money in worst case scenario. If we calculate the LTV based on ARV, then if the contractor backs out or something goes wrong, we'll never get our money back because we lended at the ARV price which will no longer happen UNLESS you file the lien and take over the rehab.
Im not understanding what youre asking. It sounds like youre implying that you would give the borrower cash at closing to complete the rehab with the loan amount based on the full ARV? If so, this is a very bad idea.
In the case of a distressed purchase and subsequent rehab, the funds being disbursed at closing go directly into escrow to fund the purchase (minus the borrower's downpayment). From there, additional loan funds are disbursed in draws once the associated work is completed. The borrower does not get a lump sum for the rehab at closing.
A note about this - every lender is slightly different. Some will send draws to the borrower to pay the contractors (also not a great idea), some will pay the contractors directly, and some will reimburse the borrower once the contractors have been paid by the borrower. Up to you on how you want to operate.
Post: What would you do? 1.5% rate difference on HELOC
#2 Creative Real Estate Financing ContributorPosted - Lender
- Charleston, SC
- Posts 1,116
- Votes 939
1.5% difference in rate on 100k is largely immaterial in the face of what youre describing. I would get the Heloc, but use it as a reserve source of liquidity. I agree with the others, overleveraging like youre describing is unlikely to pan out in this market. If you're able to put 7k+/month toward paying down the heloc, then just save that money for a downpayment instead. It sounds like you would be able to save enough for a downpayment on a new property each year.
Post: One Time Close Funding or 100% LTV Funding (PR)
#2 Creative Real Estate Financing ContributorPosted - Lender
- Charleston, SC
- Posts 1,116
- Votes 939
100% financing doesnt exist for what you're looking for.
Post: When do you consider refinancing?
#2 Creative Real Estate Financing ContributorPosted - Lender
- Charleston, SC
- Posts 1,116
- Votes 939
It will depend on your loan size and the recovery period. Typically, if you can recover the cost of a refi in under 2 years, it's worth considering, and if under 1 year, then it's probably a good idea. A % reduction in rate doesnt always tell the full story because a 1% reduction on a loan balance of $100k wont save much, but a half percent on $600k will save a fair amount.
Post: 2nd Lien Position Funding
#2 Creative Real Estate Financing ContributorPosted - Lender
- Charleston, SC
- Posts 1,116
- Votes 939
Post: 2nd Lien Position Funding
#2 Creative Real Estate Financing ContributorPosted - Lender
- Charleston, SC
- Posts 1,116
- Votes 939
80% LTV is high for investment funding as is. I cant imagine anyone with half of an understanding will go into second position at 80%+ CLTV. Youre playing russian roulette at that point.
Post: Contract for Private Lending
#2 Creative Real Estate Financing ContributorPosted - Lender
- Charleston, SC
- Posts 1,116
- Votes 939
Quote from @Steve Balinski:
Quote from @Patrick Roberts:
$2k seems high. I would expect about half of that for a straightforward note and mortgage/DOT and title review. If there is something complex about this deal, then maybe that justifies more. Also, a reasonable amount of this will be paid by your borrower in the form of fees (this is part of what those fees cover).
This is also why most lenders have minimum loan amounts. Origination costs are largely fixed - it's roughly the same cost to lend $200k vs $20k.
If I can charge the borrow for that, how would I phrase it or justify them paying for it?
Most lenders list it as a legal fee, origination fee, or document fee on the term sheet. Some include this in processing fees.
Post: Contract for Private Lending
#2 Creative Real Estate Financing ContributorPosted - Lender
- Charleston, SC
- Posts 1,116
- Votes 939
$2k seems high. I would expect about half of that for a straightforward note and mortgage/DOT and title review. If there is something complex about this deal, then maybe that justifies more. Also, a reasonable amount of this will be paid by your borrower in the form of fees (this is part of what those fees cover).
This is also why most lenders have minimum loan amounts. Origination costs are largely fixed - it's roughly the same cost to lend $200k vs $20k.
Post: Secure file sharing and sensitive data protection?
#2 Creative Real Estate Financing ContributorPosted - Lender
- Charleston, SC
- Posts 1,116
- Votes 939
Depends on your tech stack. If youre using a dedicated origination platform like Baseline, TMO, Mortgage Automator, etc, then I believe they have add-ons for this. Another option would be to contract with a third party cybersecurity provider for this and related services. My provider is currently revamping my setup to provide a secure document storage and sharing service that is standalone from other programs as part of the services they provide, in addition to other cybersecurity measures. Also, check with insurance agent on your liability/E&O policies on this topic - they may have certain requirements as well.
For esigning, adobesign and simplifile are popular.