All Forum Posts by: Ryan Blake

Originally posted by @Jay Hinrichs:

Robert last comment.. I have some pretty good back ground in HML and although inactive hold a NMLS license.. which is required in 12 states along with state specific licenses to do loans on 1 to 4 unit non owner occ or owner occ.. I know many lenders who come from states that are the 38 or so that require no license get caught up in this and will get cease and desist and the bigger HML if you do check their website you will note NMLS and state license were required Lima one is not going to pay you in a state that requires a license I know that. .. so when U state you loan in 48 states.. and when one checks NM LS and you are not licensed that is telling.. I get the broker stuff I do.. I have a real estate license but don't really use it.. But have owned 2 HML companies over the years where we loaned our own money no brokering.

Unfortunately the pump and dump advance schemes are a live and well right now.. again not saying you don't actually close stuff.. But i just had a client in Seattle send 6k to a fake lender he found on Bp and he lost it..  And of course if you follow Do Hard Money they require 3k up front and some get on BP and say they can never get funded as the deals are not good enough.. Which i get it. 100% financing has to be rock solid.. but those investors who try this stuff usually have to put the advance fee on a credit card then are further in the hole.. or like this guy who was risking your fee and 15K in EM..  when in Fact you have zero control over the funding your relying on a third party.

Bottom line its like flying a small plane you just dont know what you dont know until your in the middle of a crisis.. LOL.. I know I flew small planes for 30 years. 

So if your lending in 48 states and actually closing loans in that many states and taking compensation in the ones that require licenses,   for instance

Oregon California Nevada one of the Dakotas  Tennessee etc.. then your not doing it within the guide lines of the law.. With Nevada being one the prickliest ones..

And for sure Borrowers withhold info ALL the time that is just a given.

Thank you for the post and clear advice on running HMLs you have been the king of giving out info and I thank you for that. Awhile back, about a year ago, you even corrected me and gave me some advice on things. Appreciate your input on these forums. I think @richard berg is no longer a member as we can't tag him in the posts (not a good sign) but he was worried we were all saying bad things on his company. Some people were but you and I were just cautioning on the huge risk of paying large up front non refundable fees. There are too many companies that make there money off just those. It is sad when there are a majority of lenders that will require no fees. We weren't saying his company is a scam because like you said they may close many deals but it is just very suspect when on a fix and flip loan you are charging $2k or $4k as in @Moses Jean's case. That is normally only for large deals at $2m+. Hope people see these posts and use a lot of discretion.

And I never could figure out where Xpress Loans was located. No address on their website and no google reviews.

@Account Closed in short you are a broker with $30m in experience (per your borrower above). You charge a large non-refundable commitment fee. I merely am saying, 90% of hard money lenders will not charge this fee.

To all who are looking to fund a deal, if you are fine putting up a large commitment fee, please use Xpress Loans. They may be a great fit for you. If you are worried about large non-refundable upfront fees, please visit the Bigger Pockets list of lenders and ask for references and term sheets from recent closings. There are plenty of lenders out there, go with ones in your specific market who you have received referrals for.
Location and being a direct lender matters.

@Moses Jean I am curious about your experience.

It is just very odd that we are now getting 3 posters who have a favorable opinions of the company but are all brand new users to the site. Doesn't mean they aren't true but it is just very strange that ALL the positive comments right now are from brand new accounts.

No one is staying that it is a scam for sure but it is fishy to request commitment fees on small loans like the poster who said they requested $2,900 on a $100k loan. That is NOT normal. Doesn't meant it is a bad company but they are not doing common lending practices. Just strange.

@Brady Shipley It is a fun job to flip. You get to exercise creativity, financial analysis and negotiation/sales skills all on the same project. I love it and have done it now for over 11 years. Just vet your lender and agent well. They are not all equal.

@Tim Cook I bet this one is going to fill up fast! I love @Jason Coyle's work and can't wait to see this.

Everyone else, this is a great opportunity to learn from a seasoned investor only GC that has done work all over DFW and North Texas. Even easier since it is a web meeting on Saturday morning! Hope to see you "there."

@Dona Miller Most hard money lenders won't lend on auctions because there is no time to do a title search. Your best bet will be to get a line of credit or find a private lender / partner with money to go in on the deal with you.

@Kathy Green Hard money lenders won't lend on a personal home, trust me. It actually would be illegal. Hard money loans are low document loans based on hard asset. That goes directly against Dodd/Frank regulations. I think you are playing in a dangerous situation if you go the hard money route.

I also want to help give you realistic expectations. Hard money lenders will cover up to 75% of the ARV (that is the max I have seen most tend to be at 70%). Your ARV is $595k. So that would me 595k x 75% = $416.5k is your max loan amount. You won't even be able to use hard money just to cover the $500k purchase. So even if you wanted to roll the dice and owner occupy a hard money loan, it won't be enough for you.

If you don't want to use your credit/income to qualify for a 203k loan that will require only a 3.5% down payment (96.5% LTV) then you will probably need to get an unsecured line of credit. This will have a very high interest. And I don't think you would be able to get that for anywhere near $500k.

Something to think about your calculations on Profit. You have left out some key expenses. Interest on the loan for 4 months while you fix it up and sell it ($530k loan at 12% APR for 4 months = $21,200), insurance expense ($2,500), property tax expense (which I hear can be high in Florida so lets assume 2% of value but only held for 4 months = $3,500), and your realtor fees to sell with closing costs (6% for commissions and 1% for closing costs of sales price = $41,500).
This will leave you with a $3,700 loss before you pay the 1 year lease at $36k. Your net on the year would be a negative $40k.

@Dallin Wood Your HML should provide you with a letter of intent that is commonly used as a POF for offers like that. @Aaron K. was spot on with his explanation.

@Trent Danelski Here is a small list of the events I try to attend in Tarrant County.

IMPACT Grapevine - https://www.meetup.com/DFW-REI-Network-Investing-Meetup/ - Started in Bigger Pockets this group meets on the 3rd Monday of each month. Just straight information and super friendly atmosphere. Great speakers that won’t try and sell you on a program. Meets at the Dave and Busters in Euless. Free dinner provided.

IMPACT HEB - https://www.meetup.com/realestate-427/ - This is a newer group and has a power couple who lead it. They invest all over DFW and offer mentoring on top of the monthly informational meetings.

West DFWREI - https://www.meetup.com/West-DFW-REI-Group/ - This is a smaller group but provides tons of information. The leader is a pro at sub-to deals and is very giving of his time to help out new investors who are serious. The group meets 1st Saturday of each month in the Southwest Fort Worth area. There is also 1 or 2 other meetings throughout the month.

1RE Club - https://www.meetup.com/1REClub/ - This group is led by a former Rich Dad coach who has been investing in DFW since the 1980’s. Super knowledgeable and takes integrity and his Christian faith into all the deals he does. He also offers coaching where you joint venture on deals. This meeting is the 2nd Thursday of each month at the Fort Worth Botanic Gardens meeting rooms.

Texas Tuesdays Mastermind - https://www.facebook.com/events/the-sogio-building/texas-tuesday-fort-worth-real-estate-mastermind/1830836547025917/ - meets 1st Tuesday of each month and is completely free. Has info from a variety of professionals with no sales pitch other than the opportunity to go to a full day workshop with the same speaker. The full day work shops have a charge but 100% of the fee for the workshop goes to support a kids cancer fund. Free food and free adult beverages. 50+ in attendance. Meet in North Fort Worth.

Texas Investors Club - https://texasinvestorsclub.com/ - meets the 3nd Tuesday of each month and is completely free. This group is big. Like 80+ in monthly attendance. There is free food but show up early if you want to get some. There is a cash bar but you get one drink ticket if you pre-register. The event is completely free.

AREA Real Estate Investing Group – https://www.meetup.com/realestate-445/ - Smaller group that meets once a month. Free to attend.

@Himanish Gupta I don't think I need to know any other info than what was provided. Stay away. You will get a request for a commitment fee or application fee as soon as you show interest to "secure" your rate. This is when you kiss that money good bye.

NEVER PAY A LENDER ANYTHING BEFORE THE CLOSING. There is too much room for scams and abuse.