All Forum Posts by: Wyatt Ferm

Sorry to hear that happened Ashley - that's incredibly frustrating. I think Peter covered the best course of action. Going after their license is the most impactful thing you can do at this point IMO. 

Hey Emira I would start by learning the math of what makes a good flip. If you are very beginner, then make sure you know all different terms (ARV, AIV, ROI, etc). If your serious about it you should join facebook groups, go to real estate networking events, connect with people who are doing it and ask them questions. How do they evaluate deals? How do they evaluate contractors? Where do they get their financing from? Etc

Quote from @Sam Dunlop:

Hey everyone, I wanted to get the opinion of someone with more experience than I have. I am looking to purchase a fix and flip in Daytona Beach, Fl. The deal makes sense financially however the house is in a flood zone A and flooded during this past hurricane season. This is the first time this area has flooded in years. With hurricane season now over and the house would (hopefully) be sold well before the next one I am curious if anyone has any seen any change/decrease in sales with areas that have flooded recently? Thanks!

Hey Sam! Doing a Fix and Flip in a flood zone is totally fine, but there is obviously added risk on the exit. You'll need to make sure the ROI spread is large enough that you can still turn a healthy profit if you have to sell under what your projecting for ARV. I work for a hard money lender called Backflip and we have members/investors do flips in flood zones all the time. The only real difference is you'll need to purchase flood insurance on the property during the project and all good lenders will make you do this to insure your risk is mitigated. 

No appraisal is interesting. All the hard money lenders I've worked with in the past (and the one I currently work for) deem an appraisal necessary for risk management purposes to insure AIV and ARV estimates are good.

Curious how you'd manage risk without one? 

Quote from @Caleb Johnson:

I am interested in using a hard money lender to buy a property to flip. What are some questions you would ask a lender to vet hard money lenders? Also what are some things you look for in a lender? Do you recommend a local one or does it not really matter? Thank you! 

Hey Caleb, I work as an Account Executive at a hard money lender called Backflip. There has been a lot of great info shared already but here are the main themes you should consider with specific questions for each: 

Loan Terms and Costs

1. What is the interest rate on the loan?
2. What are the points or origination fees associated with the loan?
3. Are there any additional fees (e.g., underwriting, appraisal, or prepayment penalties)?
4. What is the loan-to-value (LTV) or after-repair value (ARV) ratio that you offer?
5. What is the repayment schedule (monthly interest-only, balloon payment, etc.)?
6. What is the typical loan term? Can it be extended if needed?

Down Payment and Funding

1. How much down payment is required?
2. What percentage of the repair costs will you finance?
3. Do you fund repairs upfront, or is it done through draws? If draws, what’s the process for accessing them?

Property Appraisal and Underwriting

1. Do you require a formal appraisal or just a broker price opinion (BPO)?
2. What is your underwriting process and timeline?
3. What qualifications do you look for in borrowers?

Loan Flexibility

1. Are there any restrictions on the types of properties you’ll finance (e.g., location, property condition)?
2. Can the loan be transferred to another buyer if I sell the property before the term ends?

Risks and Contingencies

1. What happens if I can’t sell or refinance the property within the loan term?
2. What are the penalties for late payments or default?
3. How do you handle disputes or issues during the project?

Lender Experience and Reputation

1. How long have you been lending in the fix-and-flip market?
2. Can you provide references or examples of successful projects you’ve funded?
3. What sets you apart from other hard money lenders?

Closing and Timing

1. What is the average time to close a loan?
2. What documentation will you require at closing?

Exit Strategy

1. Do you offer any programs or partnerships to help borrowers refinance or sell the property?
2. Do you have any recommendations for real estate agents, contractors, or other resources in the area?