BiggerPockets

Los Angeles Hard Money Funding Q & A

Tuesday, October 19

I get asked alot of questions so I am posting the most common ones and most common scenarios for your convenience and edification.

Are you a broker or the lender? Both, but I primarily broker the deals because I do not personally have enough funds to both loan out And invest in flips. Sometimes the funds I do have at my disposal are best utilized for a loan, and sometimes its best to use it to acquire a property for myself.

How many points? As low as 3.5. As high as 10.

How much down payment? As low as zero. As high as 35%

What's the interest rate? As low as 9%. As high as 13%.

What if I have very little or I don't have anything to put down? In that case the deal may be structured in such a way that my investor is an equity partner on the deal with you. Be prepared to give up most of the equity proceeds to make the deal worth investing in for my investor, or perhaps take a cash finder's fee upfront and move on to the next deal.

Do you do deals outside of Southern California? Yes, I can facilitate them.

What is your minimum loan amount? Typically 50k, but it can be lower. Whats most important in situations involving small loan amounts is that the average points charged do not make for as profitable a deal in terms of the time spent working on it. My advice- Be open to a flat fee that amounts to a lot of points charged.

Do you have a maximum loan amount? Yes, but it hasn't been reached yet. So if you have a large loan amount deal, just submit it.

Do you do owner occupied? Yes, though less often lately.

How long does it take to close a deal? From the time any documentation needed is received, it should not take longer than 2 weeks for funding. It could be faster depending on the strength and preparedness of the deal, but on average say 3 weeks from start to finish in most cases.

What documentation is required? Varies. Though it should be noted that the udnerwriting guidelines for a hard money loan are nowhere near the underswriting guidelines of FHA and A-paper loans.

Do I need an appraisal? Varies. Sometimes yes, sometimes no.

What if I have bad credit? Credit is not the deciding factor. You can have bad credit.

What is the maximum LTV? 80%. Varies from deal to deal. The average LTV is more like 60-70%.

Do you go off the ARV (After Repair Value)? Yes, I can but I do not always go off the ARV.

What is the maximum ARV? 80%. Varies from deal to deal.The average ARV is more like 60-70%.

I hope that answers some of your questions.

Enrique

818-915-2543

Los Angeles Hard Money Funding- Zero Down

Tuesday, October 19

For those looking for hard money loans on residential investment deals.-

Lately I have been brokering more hard money loans at more aggressive terms than normal. (Notice I said more aggressive, not cheaper)

If you have nothing to put down on a deal, its still possible to get it done. It will not be cheap (expect 8 points to be rolled into the deal), and be prepared to take only a portion of the profits.

Bottomline, if you want to get the deal done, be open to how it is structured and don't expect to make as much on the deal as you would make if you were putting 15% down or more.

Remember, if you aren't the one risking your money, you aren't the one with the most to lose. The person with the most to lose is ultimately the one who decides if its worth taking the risk. If you've put 30 or 40% of the purchase price as a down payment, the loan won't be a problem (or so expensive either, but that's a separate blog).

Enrique

818-915-2543

Transactional Funding In Los Angeles

Wednesday, May 19

Funding back to back transactions in Los Angeles and Orange County.

Contact me for details on pricing and guidelines. References also available.

 818-915-2543 ph

Introduction and Overview

Saturday, May 01

For those of us in the thick of it here in Southern California, the real estate market is buzzing. Los Angeles has always been my home and Real Estate has always been my focus.

Whether as a buyer, partner, lender, or wholesaler, if we can work together on our next deal, I'm happy to keep growing and working with experienced and novice investors alike. I look forward to many successful transactions with fellow BiggerPockets members.

My positioning in the market is multi-pronged.

 1) Privately funding residential and small commercial real estate investments in the southern California area with the private lenders I work directly with. This means hard money loans, bridge loans, transactional funding, and joint ventures.

2) Expanding my private lender base to take on more trust deed investors looking for a 9-13% annual return, and in turn fund more loans not only for myself but for other investors who are looking for solid financing at competitive terms.

3) Buying property in my own backyard of Los Angeles and surrounding counties.

4) Joint venture or wholesaling property if I or my partners choose not to move on it.

I have bought or funded short sales flips, probates, tax defaults with small/no loans attached, foreclosures with equity, rehabs, reo's, etc... Whatever the deal, if its a discounted property, I am equipped with the experience, knowledge, and funds to move on it. The faster the deal the better, the more equity in the deal the better, the less money it takes to get into the property the better.

My goal is to continue completing as many successful and profitable transactions as I can muster, while working with more people who are fair, not greedy, appreciative, good natured, sharp, driven, disciplined and ethical.

Initially wholesaling abandoned properties to local investors, I began to buy them and flip them myself. Hard money lending also entered the picture by request when would be sellers asked if I could help with a loan, and some investors I work with entertained the notion. The focus of my hard money business has since turned to professional borrowers exclusively, and expanded to include not only traditional hard money loans but encompasses just about anything necessary to close highly profitable deal for my fellow investors.

Time is precious, lets make the best of it.

Enrique Barrios