I am a real estate attorney and realtor in Austin, Texas, and I represent a lot of investors. Most of them are fix-and-flip guys who buy single-family houses only.
The going rate for hard money seems to be 14% and 4 points right now.
If there are any private lenders who can beat that (how about 13 and 3?), I can send a ton of business your way.
$100k minimum and you would need to be able to close quickly.
If you refer someone to me who makes a private loan to one of my clients, I can pay you a point as a referral fee.
I have a hml who lends at 11.99%. Their is no credit qualifications, just the deal itself matters. The only catch is that some money is needed. Investor must provide for 10% of purchase price and 50% of fix up costs if any. Usually will roll 3 points up into loan, but will vary.
Will carry up to a 5yr balloon and a 30yr amortized rate.
Hello Drew,
I am a commercial mortgage broker and in the same boat. I have some clients with a great project, great credit, good assets yet the current lenders just won't budge on the lending. They are only lending on current cash flowing properties, period. It has resulted in almost a total halt to rehab and development in urban cores. Even the hard money lenders are turning down anything that is not currently occupied or over 40% CLTV, the projects can just not get done. I too am networking to find private investors who are willing to make good interest on their money with short term bridge lending. It makes sense, I am not sure why it is not happening more right now as I see it as the only answer to the current lending situation.
The banks are going to have to be by-passed. Individuals with the money could be lending it to those with these projects that are solid, secure it all with a first lien, draw it up by a reputable lawyer and court house recorded. Where else can individual investors make even 8% on their money that is secured? Not the stock market! Someone needs to get this economy rolling again, why not those who have the funds to lend? They make money on their money, the commercial buildings get filled with business that employ people and the investors hold their investments verses loosing more holdings investors in the market and end up with a lot of empty buildings going to waste in our cities.
Sounds like a win-win to me, both for the economy and those who are willing to lend the money. Now, it is just a matter of finding those who have the money willing to lend without wading through all the scammers out there.
Yep, same boat, same paddles, same upstream current.
Private money investors are not easy to come by so I doubt you will find any of us investors willing to give up our own for your clients. That being the case, I suggest you start marketing for your own as I have done.
As far as HML's, I was just quoted 12.5% with 3.5 points which is a bit better than what your investors are receiving.
Edited: 06/26/2010 at 08:21AM
Will Barnard, Barnard Enterprises, Inc. E-Mail: info@barnardenterprises.com Website:http://www.barnardenterprises.com info@barnardenterprises.com
Jesse, what you described is not what I call a hard money lender. Requiring the buyer to have skin in the game, even with no credit check, is soft money.
Mary Beth, I have a few guys who are lending, but the going rate around here seems to be 14 + 4%, and I'm looking for something better than that.
nationwide, why wouldn't you want to refer your lenders to me? Do they only have enough money to do 1 deal at a time? I would think you'd want to hook us up and get a point at closing for a referral fee. Oh well.
Drew,
Do you deal with larger commercial real estate projects as well? I work for Kennedy Funding where we specialize in short term real estate loans. Please advise.
My experience is similar to Jesse's. You either need skin in the game like the terms Jesse lists, or you need good credit and some cash reserves.
As far as I can tell, and the question crops up here about once a month, there are NO lenders will lend you 100% of purchase price plus 100% of rehab plus money to cover the costs and ignore your credit rating and cash position.
Why? Because they can. There are way too many deals chasing way too little money. So, there's no reason for lenders to be more flexible. They can put all their money to work even with tighter guidelines.
Further, no lender wants to take a property. During the bubble you could count on getting even more than the initial value. Now the reverse is true. According to the latest Case Shiller data just released, Denver is the best in the 20 city survey with only a 5.6% year on year decline as of March 2009. Phoenix led the way with a 36% year on year decline, with numerous cities close behind. If a lender ends up taking a property six-12 months from when they make the loan, they have to assume it will be worth significantly less than it is now. So they want to be sure the likelihood of taking it is low.
nationwide, why wouldn't you want to refer your lenders to me? Do they only have enough money to do 1 deal at a time? I would think you'd want to hook us up and get a point at closing for a referral fee. Oh well.
If my supply of private funds was more han I could use, then of course I would Drew, I am not a fool! The problem is, I need every last dime they have and then some because I am involved in multiple deals constantly and any private funds I have available would be used, with the exception of a few $10k-$20k loaners which are too low for me right now.
Edited: 06/26/2010 at 08:21AM
Will Barnard, Barnard Enterprises, Inc. E-Mail: info@barnardenterprises.com Website:http://www.barnardenterprises.com info@barnardenterprises.com
Trying to strong arm someone for one point isn't going to get you anywhere here. Giving up a true HML is worth a little more than 1 point don't you think? Especially when jeopardizing money that can be put to better use in ones own business.
Hello Drew,
I saw your post and thought I might be able to help out you and your clients. My name is Kattie and I would love to help you get things rolling. Especially since you are right here in Texas with me! I will give you a little information about myself and the company that I am with. I am with Boca Capital, LLC is a Houston, Texas based commercial loan consulting firm. We offer competitive rates and fees and have direct access to funding from $1,000,000 (One Million USD) to $5,000,000,000 (Five Billion USD) for the purposes of construction, development, refinancing, expansion, and start-ups. Limited personal and business financial disclosure required and there is no personal recourse (all loans secured against project (lender holds 1st lean)). Credit is not an issue. Please send your business plan, executive summary, and pro-forma(s). If a business plan has not yet been fully developed, we offer services to develop those as well. Email me today to get your project off the ground. (References available upon request) If you do, in fact, have any projects that are in need of funding, I will be happy to send you a project information sheet for you to fill out and return. Also NDNC (non disclosure, non compete) documents can and will be sent at your request. I look forward to speaking with you and helping you in any and every way I possibly can!
Kattie A. Andersen
Personal Consultant
Boca Capital, LLC - Houston
[EMAIL REMOVED]
Edited: 06/26/2010 at 09:31AM
by Moderator
: please place e-mail in signature
Jesse R and Nationwidepi- I'm in MN and I have investors that are willing to put in 10-20% into each deal. They need short term financing for the rest of the purchase.
Any help greatly appreciated.
I don't provide hard money loans or rehab loans, only transactional funding for short sale and REO investors where the end buyer is already in place.
I am not sure where you get your definitions from, but in the current lending market, many HARD money lenders are requiring some financial skin in the game.
Let me go back to this statement as you have made a secondary comment on it.
I am not in the business to make some mark-up point on my own PML's, causing the investor to pay more than they should. This statement riminds me of the many daisy chains in the bulk reo world (which is a joke to me).
You can take offense if you choose, but my private lenders are MY private lenders. I work hard to obtain them and keep them. The last ting I would do is refer them to someone I don't know, and have no current or previous business relationship with and risk that person not paying my PML back and ruining my own relationship with them.
If you think I am crazy or greedy for not turning over my list of PML's, I would say you are the crazy one! (no personal attack intended)
Edited: 06/26/2010 at 10:18AM
Will Barnard, Barnard Enterprises, Inc. E-Mail: info@barnardenterprises.com Website:http://www.barnardenterprises.com info@barnardenterprises.com
Finance Solutions Of America LLC has recently introduced a funding program for professionally organized real estate funding transactions.
Foreclosures, REO's, short sales, and rehab financing are now readily available to anyone who can demonstrate expertise and have a project that makes sense.
No credit score required. Minimum interest rate is 11% and up.
Hard Money Loans are an asset based loan based on the collateral value of commercialor residential real property. Typically, Hard Money Mortgage loans are funded fast, usually within two to three weeks. Credit is considered but is not the most important factor in making Hard Money loans. It's the collateral value that counts and most loans will not be higher than 60%-65% loan-to-value. The term of the Hard Money Loans are short, typically 12 months.
Email all of your contact information and we will send you complete details in return.
FINANCE SOLUTIONS OF AMERICA LLC
info@finsolamerica.com
Please read the forum rules! Your post is nothing more than spam and judging by your negative 64 influence level already, so were your other two posts of 3 total!
Will Barnard, Barnard Enterprises, Inc. E-Mail: info@barnardenterprises.com Website:http://www.barnardenterprises.com info@barnardenterprises.com
Hey Drew...long time no chat. Did you have any success with this? We have some deals that need cash parked in them right now.
Edited: 06/26/2010 at 01:00PM
by Administrator
Bryan Hancock, Bullseye Capital Real Property Opportunity Fund E-Mail: b.hancock@bullseyecap.com Telephone: 1-800-577-0401 Website:http://www.bullseyecapfund.com I help busy people profit from real estate
May 26 '09, 01:38 PM
