All Forum Posts by: Shawn Krieger

If that's accurate, take that $200k and find another investor/friend that's willing to match your $200k and go but a 1.5 mil apartment building.  You live in Woodbridge, I know you have friends or someone else to partner up with.  Start looking!

I have a client that wants to ask the lender for proof of funds. The clients wants ensure that the lender has the funds to lend before he sends any fee. I've been in commercial lending for a while but I'm pretty new to real estate lending. During my time in commercial lending, I've never had a client ask for a POF from a lender to prove that the lender has the funds to lend.

Is asking a lender for a POF common? Would a lender normally provide this?

@Shawn Krieger What exactly is your experience with brokers versus banks besides being an extern? Speaking from personal

experience there are many situations where brokers do not make sense because they don't like to hold debt so they prefer to originate debt that can be sold on the secondary market. Secondly brokers often do not like to do loans under 500k in secondary or tertiary markets and or charger higher third party fees where it does not make sense because they are not familiar with an area. We had one deal where the appraisal was 1200 higher because they wanted an appraiser from

3 hours away do an appraisal. Having a strong relationship with a local bank is also very valuable with obviously the biggeat downside being if they can't do the loan then that could be detrimental to close the deal

but you can negotiate terms like prepayment penalties much easier. I almost always shop

a broker and a number of banks so I get a snapshot of what both can offer. My relationship with a local lender has gotten me first access to their banked owned assets which is huge getting off market deals from

the bank directly, a large unsecured line of credit with no annual fees at prime plus 3

percent and also the underwriting process is smooth because I can talk to the PRESIDENT directly and they are familiar with my finances. To get that level of service from

a broker is difficult when they have clients giving them millions of dollars in business. Now times have changed because now that I'm doing million dollar deals I can get a different level of service but for you to write that post as a novice to the lending industry and in a private message to me say that it is an advantage because you have more energy to hustle is laughable. I will go with an experienced lender any day because they have a reputation to protect in addition to skin in the game.

@Marie Fries

If you are shopping around a broker is best but I prefer to work with local lenders because they have the pull to do portfolio and make exceptions when necessary. As for a sales pitch if you are getting long sales pitches then I personally think its because you arent adequately communicating what you want of need.

@Shawn Krieger

We are interested in the BRRRR strategy for scaling and would like to start with single family to learn, but understand we need to get into multi family as soon as we can.

Thanks everyone!  @Chase Louderback I was thinking along those same lines and am planning to structure it as 50/50.  

I will offer the preferred return on his investment but I have a question.  If, for example, he puts in $200k of equity and is receiving a x% preferred return, does that preferred return stop once he's paid back a total of $200k or is it $200k plus the x% annually that would trigger us going to straight 50/50?

Thanks for your thoughts!im

Who isn’t looking for such a deal