All Forum Posts by: David Wright

@Christopher Grant - Your questions are exactly why most hard Money Lenders have a reserve requirement, which is part of the closing cost.  They want to make sure the investor has money for the reasons you stated, even when it's a 100% financing deal.  So you need to have reserves saved up or have a partner in your business with these reserves.

As far as having different ways to structure hard money loans, typically there is nothing new under the sun.  All of us Hard Money Lenders normally have very similar guidelines, terms, rates, and structures.  We want to make it sound like we have something unique and different, but not really.

Now when it comes to customer service - YES.  There are major differences so be careful.

I wish you the best Christopher and if you need any help let me know. 

Awesome

@Jose Gonzalez - I can't tell you what to do, but timing is extremely important.  And if you are waiting not to be nervous or be perfect on your very first deal, it will not happen.  You are going to make some mistakes but that is how we all learn this business.

As it relates to your first deal, your credit score should not be a problem.  I do loans for new investors with scores even lower than that.  The biggest challenge most of my new investors have is the down payment requirement and closing cost.  For new investors many hard money lenders require 30% down.

I say jump in!  I wish you the best.

I would also add to your list to be on the look out for "Subject To" deals as well.  I wish you the best.

@Launi Shapiro  Also please keep in mind for your team to get a few good commercial lenders.  Eventually you will need us if your business takes off.

@Jacob D Cockerell - speaking as Broker for Hard Money Lenders you can expect the following for a new investor:

1.  30% Down payment + Closing Cost and Reserves (3 to 6 months of the monthly loan payment)

2.  Interest Only rate anywhere between 9% to 14% depending on lender

3.  Terms between 6 to 24 months for rehab loans

4.  80 to 100% paying the rehab cost of the loan

5.  Not the best customer service with most lenders (just trying to be honest)

I hope this helps you Jacob and I wish you the best.

@ Miles Trumble

30% on a Hard Money loan is Not unrealistic its the norm for newbie's normally.  The more verified experience you have the less down payment you are required to make with many hard money lenders.  

@Patrick Philip

That depends on a few but very important factors.  What type of transaction is it....fix and flip, buy and hold, is it a permanent loan, a bridge loan, rehab, ground up construction, etc....

It could be 7 days to 6 months or longer, it all depends.  But the fastest why to close ANY loan is to give the lender the documents they ask for immediately, no excuses.

When an investor asks me (which is everyday) how quick can you close?  I ask them how quick can you give me what I ask for and need?

I hope this helps.  Much success.

@Yolanda Martinez

Yolanda, I am a commercial lender like many of the others here that have given you very good information and advice.  The one thing I would add (which doesn't really help me) is to check with your local banks and credit unions in your community.  You be surprised what they have to offer.

Yes, it is sure that banks and credit unions do not really focus on investment property lending, but some will do it and to be honest with you their rates and terms are going to better than any hard money lender you can find most likely. 

I wish you the best.

@Ryan H. Joseph

Ryan very good questions.  A few tips below:

1.  Remember, that the best results for Direct Mail is consistency.  Plan on making a commitment to mail at least once a month for a minimum of six months.  If that is not in your budget, do not waste your time doing direct mail.  Find another marketing strategy.

2. You asked "Should I mention this will be my first investment property?".  Why would you do that Ryan?  Would you want to invest with a person who has never done a real estate investment deal?  Do not lie, be honest if they ask, but do not feel obligated to volunteer your experience level.

3. You asked; "Can I follow the same techniques used for sending yellow letters to SFH property owners or do you suggest doing anything differently?" Any good List vendor can you give good advise on this question, but it is basically the same technique.

Its the List that makes the difference.  For example the List for Apartments would be to target "Landlords with Code Violations list."  

4. You asked "How much research on a given property would you do in advance? Would it be a waste of time to do any research or run any numbers before getting a call or feedback from the owner?"  Having the correct List will minimize the research needed, but its always a good idea to do more research, just do not let it turn into procrastination from moving forward.  The key is finding a motivated seller who not only wants to sell, but NEEDS and HAS TO Sell.

I hope these tips help you Anthony and I wish you the very best.