All Forum Posts by: Paul Klei

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?

0 Votes

Quote from @Paul Merriwether:

Google Point & Unisom for links two of several

In terms of financing an acquisition, this might be an interesting take on equity financing.

0 Votes

Quote from @Caroline Gerardo:

New Jersey to the max. Started 2018. The minimum loan $400000 though they advertise lower they want short term deal that pays four points or more. Michael Mikhail is the boss. Jake is helpful. Many on the phone can't answer questions. NOT for NONQM. They can do hard money on subject property that looks great. I do not sell or use hard money, I can steer you to someone who fits your unique situation, without any commission. Hard money is for short term deals when you are dire. You must have a plan to sell or refinance in twelve months. Don't take a prepayment penalty, buy out of it.

Hi Caroline, thanks for sharing. I have a call scheduled with Stratton tomorrow to discuss a hard money option. Their site seems to indicate that they offer the option to underwrite purely on the property, which is what I'm seeking. I'd greatly appreciate the names of other lenders you know of who fit that profile. Feel free to message me.

0 Votes

Quote from @Alexander Murillo:

@Adam York Hey Adam, it's definitely possible to invest without savings. Despite what a lot of old-heads will say lol. But you need to understand that if you don't have money, you need to bring something else to the table (like a good deal). If you have any specific properties you're looking at, I'd be happy to help you evaluate them. If I can confirm a deal works.. finding money/partners is easy!

I'd be interested in this offer if you're willing.

0 Votes

Overland Park, Kansas

Quote from @Jerrod Stallings:

@Paul Klei I would be interested in learning more about these opportunities to see if we can help. We work with a vast network of private/hard money lenders who are reliable and thoroughly vetted. Let me know if we can set up a call soon to discuss.

Great. I'll message you.

0 Votes

Quote from @Bill B.:

3 non-recourse loans with no skin in the game, what could possibly go wrong? Why make any payments? Who wouldn’t want to be in 3rd position?

It is a strong market and a desperate seller that makes a 0% down purchase at today’s “high risk” interest rates cash flow neutral or better. Imagine the profits a strong buyer could make at today’s “regular” high rates with a normal downpayment.

I'd offer preferred equity to the lender. They would receive the bulk of profits directly from the property and at their LTV would make a handsome profit in any case.

I'm looking at a 47M multifamily deal. A down payment at 1% is nearly half a million dollars. And it would be great to qualify for a conventional mortgage on a deal this size.

I stated that I'm not concerned with personal cash flow as much as the acquisition itself. If the properties can carry the debt, I can wait to refinance at a lower rate. Acquisition + patience = wealth.

0 Votes

Quote from @Andrew Postell:

@Paul Klei The Hard Money Lenders I use on my own investment properties fund at 75% of the ARV. None of this 80%-90% purchase price + repairs stuff. Just 75% of the ARV. So, if you can buy AND rehab at 75%...then you would only come out of pocket closing costs. Having the seller be in a junior position on that type of deal wouldn't be a realistic expectation. Most lenders aren't ok with funding past their CLTV - or COMBINED loan-to-value (which is usually their LTV as well).

I've been hearing 50,60,70% LTV from lenders. Select Commercial Mortgage offered 90% with 10% down. I've wondered about that exact thing - keeping the costs of the entire project under a lender's LTV/CLTV, and it seems to be theoretically possible. It would be more feasible if the seller really needs the cash. I've got a broker who's client is in the deal for 47M but there's a deal at 40M because his loan is coming due at a 37M balance. I could probably get him to the 37M. That's still 90% but it's an example of what's being described.

0 Votes

Overland Park, Kansas

Quote from @Derek Dombeck:

Sometimes, I will give them a rate of interest AND a percentage of the equity when I sell or refinance using a participation note and mortgage. You can also sell part of the deal as an Option to raise the cash needed. That way, it is not debt with a payment attached to it.

It sounds like you're referring to preferred equity. How do you articulate that proposal to the other party? And how do I access the secondary market for Options? Or is that an informal process?

0 Votes

Boston, Massachusetts

Heuristics. Look at the raw numbers first, then at the location. Imagine if I searched for deals by looking at each of the "41,693" zip codes first.

I could find the properties on Crexi or Loopnet with minimal info.

"I'm happy to provide those details to a lender privately."

0 Votes

Quote from @Shawn Krieger:

Quote from @Paul Klei:

Quote from @Account Closed:

Quote from @Shawn Krieger:

Quote from @Account Closed:

Quote from @Adam York:

Quote from @Cliff Benner:

I would say save up, like everyone else is saying. I invested with no money and it shot me in the foot. I had a lot of other things I did wrong that happens to most rookies, but no money to help correction those issues and got stuck in a scenario that stopped everything I wanted to do in life.

Im pretty sure I was the worst case scenario that people come up with, and I wish I would have saved more money then I did, I talked about it on the BP podcast #610 if you want to hear more about it.

But you are on the right track, start educating, budget your finances, attend meet ups, talk to lends to see what options they have. Don't be stagnant because of funds, maybe you find a seller finance deal while learning and they are ok with no down payment.

Thanks Cliff, I'll definitely check out that episode.

Be careful. Unfortunately from what I have reviewed about the "subto community" and the "elephant challenge" they do not tell you about the downsides that would have your wife and kids wondering what kind of fool would do these things. Just because a clock is right twice a day, doesn't mean that it's working the rest of the day. Beware of what you don't know and what they aren't telling. Someone posted a nice primer at https://www.biggerpockets.com/forums/311/topics/1060320-usin...

I'd start with that as a guideline.

i have a couple seller financed deals but i still need equity partners for closing costs and fees

If you can't afford the closing costs and fees, how are you going to make the mortgage payments, insurance and taxes to the seller? Just curious.

Hopefully the properties he's looking at are income-producing and the NOI can carry the debt service, etc. Lenders look at DSCR, debt service coverage ratio. DSCR = NOI divided by the amount due to the lender/seller. If the NOI is 100,000 and the debt service is 50,000 then the DSCR would be 2, meaning that the property makes twice as much as necessary to cover the payments.

yes exactly there are deals like this out there

Yes I've got several online right now. I need bridge loans underwritten solely to the properties.

0 Votes

Overland Park, Kansas

All Forum Posts by: Paul Klei

Paul Klei has started 3 posts and replied 57 times.

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?

Post: Starting out with no cash?? What would you do?

Post: Income properties are lined up. Brokers are waiting. I need hard money lenders .

Post: Income properties are lined up. Brokers are waiting. I need hard money lenders .

Post: Starting out with no cash?? What would you do?

Post: No/minimal down payment for a multi-family rental property - what's the real scoop?

Post: Income properties are lined up. Brokers are waiting. I need hard money lenders .

Post: Starting out with no cash?? What would you do?