All Forum Posts by: Paul Klei

I was told they have FICO requirements. I've been trying to find a lender that will underwrite exclusively to the property/cash flow but even hard money lenders often want to see a PFS. What about LTV/LTC? For example if you only need 40% down on a property, way below most lenders' LTV threshold, could this type of loan get up to 100% LTC?

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No other requirements?

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Exactly what I was thinking as I read the comments. I'm in the middle of setting up several MLAs right now and I hadn't even considered this as a benefit for the seller and the leverage this could add to negotiations. I had been suggesting to sellers that spreading out the sale is better because a cash sale would trigger capital gains, but I hadn't thought about how a master lease could defer them entirely. I may have some more questions for you Dave.

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San Diego, California

Credit toward purchase price makes it legally much harder for him to get rid of you if it comes to that. As part of crafting the lease and option you could make part of your down payment a minimal interest loan to him.. the loan can go into first position so he can't refinance out from under you.

It will save him a big capital gain. Maybe his depreciation offsets his income. But it's an elegant situation for you if he likes it.

Interesting. Would you mind elaborating on this point?

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Saint Petersburg, Florida

Interesting. I was told that the seller would be responsible for drafting the lease and I would review it. Is that incorrect? Also, for future reference after I'm comfortable with it, is there a template that I can use?

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Situation: The first floor of the property is occupied by a business owned by the seller. They want to remain as tenants. They "do not need to sell", so I suggested a master lease with an option. Rather than an option fee upfront, I suggested that the seller continue to use the first-floor space rent-free, and the payments they would otherwise pay to me would be considered a rent credit that would be deducted from the option fee. Now that I got them interested, I need a term sheet. Do I need an attorney to draft it? Does it specifically need to be a "master lease term sheet"?

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Quote from @Greg Downey:

Quote from @Paul Klei:

Quote from @Ryan Davies:

Heres how most hard money works:

• Rates: 10% to 14% (Most Deals are 12%)
Terms: 1 Day - 24 Months (Most Deals are 6 months)
Fees: 3-5 points(%) of loan amount (Most Deals are 3 points(%)) - $2500 minimum fee
Minimum Loan Amount: $75,000
Max Loan: 65-70% of After Repair Value(ARV)
100% Rehab Financing Available (Most Deals require 10-20% of purchase price down or cross-collateral)
Closing Timeframe: 48 Hours - 3 Weeks (Most Deals are 7-10 business days)
NO PRIMARY RESIDENCES, NON-OWNER OCCUPIED ONLY, BUSINESS AND COMMERCIAL USE ONLY.

I've spoken to a few lenders who confirmed that as long as the purchase price is below their LTV threshold the purchase would be 100% funded. That's the structure I'm looking for. Any experience with that?

I've got a couple of programs that will do that on our platform. You'll need to have a bit of experience AND those deals aren't for people with NO money. It's just so that you don't have to put money into the deal.

Please message me and tell me more about these programs. Would I only need to list my assets? Assuming so, would that get me to 100% financing?

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Dayton, Ohio

Quote from @Jay Hinrichs:

Quote from @Paul Klei:

Quote from @Jay Hinrichs:

Quote from @Paul Klei:

Quote from @Jay Hinrichs:

Not all hard money lenders follow the above scenarios. while its possible to get a HML from SOME lender most are cognizant of horrid credit and the increased risk and will pass .. some wont pull fico and will go equity based as your stating.. but cost are going to be higher than 9% A LOT higher

Would you mind elaborating on equity based financing? Are you referring to equity financing where the lender receives equity in the target property in exchange for financing it's purchase? Are there specific lenders that offer that loan product or is it a general option that could be requested from lenders?

meaning lenders are solely relying on the value of the property for repayment.. so very low loan to value type situations.

I assumed so but that's the structure I'm looking for. So when I ask about financing that is underwritten exclusively to the property, should I mention equity financing? Perhaps DSCR financing? Is there another specific term for a bridge loan that is solely based on the value/cash flow of the property? Thanks

there might be but your going to have to call a lot of lenders to find one that will do this especially today's market.

PS be careful of fake lenders telling you what you want to hear and trying to beat you out of 500 to 2k in upfront money.

Thanks for the heads up. I'm asking around for recommendations about lenders for that very reason.

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Quote from @Jay Hinrichs:

Quote from @Paul Klei:

Quote from @Jay Hinrichs:

meaning lenders are solely relying on the value of the property for repayment.. so very low loan to value type situations.

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Quote from @Devin Peterson:

Hi Jeremy, I have heard of them once before, I just know they have higher expectations for points and fees. If you are looking for an affordable hard money fix and flip lender, there are others out there that won't charge 4 points.

From what you heard, are they reliable and are their fees pre or post-closing?

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All Forum Posts by: Paul Klei

Paul Klei has started 3 posts and replied 57 times.

Post: How to keep going when you hit your DTI (Debt To Income) limit?

Post: How to keep going when you hit your DTI (Debt To Income) limit?

Post: Owner's Step up in Tax basis is his reason for not selling apartment building.

Post: Unique deal structure - advice wanted

Post: Where do I get/how do I create a term sheet?

Post: Where do I get/how do I create a term sheet?

Post: Best Lending/Financing Options for New Investor

Post: How to Get a Hard Money Bridge Loan with Bad Credit?

Post: How to Get a Hard Money Bridge Loan with Bad Credit?

Post: LENDER - Does anyone have experience with Stratton Equities?