All Forum Posts by: Bruce Silverman

I hear there's 300 subdivisions under construction, or approved for construction, in Forsyth County right now. I live north of SR 20 and I can tell you we don't have the roads, schools or infrastructure to handle all that's coming. People up here are trying to fight this expansion but I think it's a losing battle.

That market may be just fine for a buy & hold strategy. Prices will be considerably lower than Atlanta, so you just have to deal with the property management issues.  

My wife is from Dublin, we have family in Dublin, and we go down there all the time. There is NO comparison to be made between Newnan or Peachtree City and Dublin....both are basically suburbs of Atlanta and Dublin is 2 1/2 hours away from Atlanta, being 45 miles SE of Macon. As you say, the VA is the main employer, as the furniture factories shut down years ago. There are also two distribution centers down there, Best Buy and Fred's, but they don't employ all that many people. Dublin is still an agricultural town, and always will be, until someone comes in and opens a big factory of some kind. It will not be an easy city to find financing for your rehabs, if that's what you're looking for...I'm a rehab lender, I know. I would consider doing loans down there but they would be underwritten very closely. If you're financing your own projects you may find it a little more economically feasible, but I would still try and keep your focus on the Atlanta market. If you're based in Atlanta, do you really want to get involved in projects that far away, in a market that isn't exactly seeing a tremendous amount of growth? Are houses much cheaper down there? Sure, but there's a reason for that....

Also, you may own the property, but was the account in your name?

There have been a lot of issues with erroneous water bills. i.e. People being wrongly charged, faulty meters, people being double charged, etc. I would dispute it...lots of problems with DeKalb County government...they should work with you, $30K for a water bill is outrageous.... 

Never heard of them...

I have 28 years experience in mortgage banking and currently do "Hard Money" lending for real estate investors. 

Thank you Chase. You are absolutely correct and there is a big difference between a true Hard Money Lender and a Private Lender. Most Private Lenders are using their own funds and their capital is limited, so they may not be there for you when you need them. Nobody wants to have to shop for money on every deal. It is important to try and build a relationship with a well capitalized, direct Hard Money Lender, and you will always have money available when you need it!  

NOT ALL HARD MONEY LENDERS ARE ALIKE! That is the first thing to remember when starting to shop for a lender. That’s right; you have to shop for a lender just like you shop for the right house. Some lenders may seem a little cheaper on the front side of a deal, i.e. 1% less in rate or 1 less origination point. That small savings may wind up costing you $10,000, $15,000, or more on the back end! What happens if you take a loan for 6 months and the project is not complete and sold at that time? Will your lender give you an extension, or will you be forced to “quick sell” the house, realizing thousands less in profit than you had anticipated? What happens if you run into an unexpected issue with the rehab? Will your lender work with you to come up with a solution, or will they just say, “We made a deal to lend you a certain amount, for a specific scope of work, and it’s your problem, not ours.” Will your lender release draw funds only to you, or will they release funds directly to the contractor? Who determines that work is completed according to the draw schedule, and is indeed complete before funds are released?

I want you to ask these questions because I have heard every horror story in the business, and I don’t want these things to happen to you! A true Hard Money lender is a partner, not an adversary and a deal is only profitable if everyone wins. Does your loan have a PPP (Pre-payment Penalty)? If you’re borrowing money short term, and paying points up front, why would you pay points to pay off the loan?

When talking with a HML, make sure you understand all aspects of the loan. What is the term? Can you get an extension? What is the cost of the extension? What is the interest rate? Is the loan an "Interest Only" loan, or will you be paying back interest AND principal, making the payment more expensive? When are draw payments made, and to whom, and who determines that the work is completed?

If you ask the right questions up front, it can save you a lot of problems later AND make your deal profitable, instead of breakeven, or worse. There’s a lot of money to be made flipping houses, but not asking the right questions or wrong decisions up front, can hurt you badly during, or long after the rehab is complete.