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All Forum Posts by: Sheri H.

Sheri H. has started 4 posts and replied 15 times.

@Michael Noto Yes this would be our first time using the HML because we are just starting out. I've heard you will get better rates when you have a proven track record.

@Luke Shivers thanks for the info. I checked out the 212 Loans website and will give them a call to check out their rates.  If you guys can recommend any other lenders that you've used..do tell. :)

@Brent Cullipher Thank you for the info! We are still checking around so I will check out those companies as well.

Thanks everyone. Yes we have no experience with buying a property for sure. We'll hope to find a god deal and finish on time and on budget and hope we can eek out a small profit.

We are still looking at buying our first fix n flip. Hard Money is the only way we can finance a loan. They are typically offering 13% then want either 4 pts at closing or 6 pts at sell. We thought the points were in relation to poor credit and lower interest rates. Low interest higher pts? and vice versa..Is it fair for a HML to ask 13% + 6pts at sale when we have a credit score of 700+?

On a side note as it's a sellers market here in Fort Worth, our buyer  agent says we'll have to pay half of closing. Is this acceptable? 

we are still learning and dont want to be sitting at closing with massive fees and then when we sell we owe double commission fees too. That does not leave much room for our own profit.

@Manolo,

Luckily we are essentially the contractors for our first flip. We'll do all the main rehab work which will mean our 10k budget should stretch a little further..

Thanks so much. We spoke to HML today and we'll speak with a couple more tomorrow.

They are willing to take points/closing as down payment and say that'll be 6% of total loan.(70k) Didn't realize it'll be as much as 6% though..

We like these terms I suppose, although the one money lender we spoke with said they only lend on 6mth contracts with no pre-payment penalty. (Not sure what qualifies as a penalty; sold under 30-60days? Typically how much is prepay penalty?)

That means double the interest% rate right? Hence 13% on 70k over 6 months rather than 12 months. That's a bit pricey considering we have to pay about 1k in admin/appraisal then closing. Then we have to show we have 6 months interest payments available. Sounds like we can do it but will need around 15k investment.

Thanks for the support.

@Jeff, Thanks yes, definitely hope the HML's offer loans on the ARV rather than cost at purchase. I completely agree; the low cost rehab has little room to move between buy/sell price. Of course we can find contractors in the know for renovations we can't handle, but that's why we want to do it ourselves. Learn as we go and keep it simple. The fact we can do the work ourselves and keep it cosmetic should please the HML, less risk on their end, yet should still yield the same rewards. Down side is less profit our end, but at least it'll grant us much needed experience of the whole process. Once we have a couple of goes around the block we'll have credibility and make more profits..

@James Wise, cheers so I suppose they wil, but I've read they often charge $100 per draw.

Hello All,

My wife and I are looking to begin our first flip experience. Please let us tell you guys our situation and then any advice on how to proceed is greatly welcomed.

Our situation is as follows:

Looking to buy Single fam,  2bth 2 bed in the Mansfield TX Arlington area. We work self employed with sporadic income so conventional banks are a no no. A hard money lender is our most viable option. 

  • We have 10 - 13K in savings to put towards the project. 
  • Credit score of around 685 - 700
  • Reno ourselves, somewhat experienced

we really want to buy something in good condition so that only cosmetic changes are needed, for which we'll do ourselves e.g; painting, carpet, floors, tiling, kitchen, yard. No electrical or major foundation/roofing exp or know how. 

Hope to be in and out in 5-6 weeks max.

So here's a scenario of what we kind of hope to expect:  

HML may offer us 70%ARV, 12%, 4pts

So with the above terms in play we have a question: 

If a property that has a $100,000 ARV and the HML offers us a loan of 70% of ARV =($70k) 

..If we buy the 100K ARV property for less than the 70%, say around $60K, can we put the extra $10k that was available from the HML towards the reno? Thereby using our reserve of personal money for the unexpected, on closing and added cash for the holding costs/reno if necessary.

Basically, do HML's give a set amount of funds of entire ARV estimates regardless. Meaning we can use a portion of their money to renovate because we get the property for less than 70%

Thanks.