Looking for hard money?

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8 posts by 6 users

Dwayne Stutzman

Real Estate Investor from Wauseon, Ohio

Jul 14 '09, 08:18 AM

Looking for a hard money lender or private money for a property that I'm looking at.

Asking price is $33,000
Repair around 30,000 to 40,000

Waiting for the foundation estimate foundation is bowing in.
House is 1400 square ft. 3 bedrooms , 1 bath , fireplace in living room.

ARV is 85,000 to 90,000 house sold for 95,000 in 2005.

comps in the area are 80,000 to 110,000 some more.

Id like to get the house for around 20,000 or less for this deal to work for me.

Edited Jun 26 2010, 08:58

Rich Weese Donor

Real Estate Investor from sioux falls, South Dakota

Jul 14 '09, 09:03 AM
1 vote

I'm not familiar with your area, but this seems like a deal I'd pass on. Not enuff margin . If you are still getting bids for foundation, etc., I'd see it this way.
What it sold for in 05 is irrelavant. If you buy for 20K , add costs of close and miss on repair estimate(say 45K), you're at 65K and you haven't paid for the hard money yet, and closing costs to sell. Assume the lower end of 80K and you didn't make much for your risk.
In most areas, a single bath is what we call functional obsolescence, but as I stated, I don't know your area. Your profit would be reduced every month until sold. As a HML, I would not be interested in this deal. Other thoughts by other posters? Good luck. Rich.

Edited Jun 26 2010, 08:58

Joel Soforenko

Real Estate Lender from Boston, Massachusetts

Aug 13 '09, 01:07 PM

Dwayne, I am a hard money mortgage broker. Dwayne made some very good points. You always have to work backwards from the total cost and what it will sell for. If the profit margin is too thin, definitely walk away and find another. If you have money to put into a project, I work with several lenders in Ohio. Please contact me to discuss a project or financing information.

Edited Jun 26 2010, 09:21

Chris Chung

Real Estate Investor from Denver, Colorado

Aug 16 '09, 02:10 AM

Depending on where in the spectrum the actual numbers lie (post appraisal and bids) You could be looking at an %LTV as high as 85% which would mean that you would be looking to bring in 5-15% Cash from pocket.

If you have a chunk of cash that can be invested in the deal, it would become a lot more attractive to a hard money lender.

Edited Jun 26 2010, 09:22

Rich Weese Donor

Real Estate Investor from sioux falls, South Dakota

Aug 16 '09, 05:30 AM

Did you do something on this property? I still stand by what I said and I hope you didn't pursue it, however idon't mind being proven wrong. Good luck. Rich in Dallas.

Edited Jun 26 2010, 09:23

Brian Levredge

Real Estate Investor from Chattanooga, Tennessee

Aug 16 '09, 05:59 AM

I would find another deal and I'm basing that solely off the fact I am a General Contractor, in addition to being a RE investor. Anytime I come across something with foundation problems like that, it is best to walk. Without seeing or knowing anything about the job, it sounds like you've got stem walls around the perimeter of the structure with the floor joists being supported by piers in the center. This type of work can be very expensive (noted by your estimate) and take a long time to complete.

The bigger problem though is that you could very easily have a 30 or 40k foundation retrofit turn into a 60k job and take three times as long. If the floor joists are damaged, you may have to replace them. What about the soil? What is the composition? Are there interior footings? There could be a number of factors that could drive your costs up that the contractor initially misses. That doesn't even account for stuff he knows he can nail you on later. If that happens, you will be way upside down. Good luck whatever you decide.

Edited Jun 26 2010, 09:23

Dwayne Stutzman

Real Estate Investor from Wauseon, Ohio

Aug 18 '09, 07:25 AM

Thanks everyone for your advice and help. I let this property go the estimate for the foundation was $28,000 for it and that was just to fix one wall and to dig around the whole house lift the house and waterproof and so on but they were counting on the other walls to fall back into place .

Somebody bought it lo hope they know what they were getting into. But I see alot of people buying houses like this to live in and doing nothing to them. Or little work at all.

Edited Jun 26 2010, 09:24

Amanda Herr

Real Estate Investor from Oakdale, Minnesota

Aug 18 '09, 11:58 PM

I don't know if I'm off topic but there's a duplex across my 5 plex and the situation was like that too. The foundation was messed up just like someone was drilling a road. Somehow an investor or a person offered at $500.00 in April 09 and I think they probably flipped to another buyer for $7?,??? something. I felt bad he's going to have a hard time getting that repair or maybe he knows what he's doing and have lots of money to fix.

If it was a flipping to the end buyer and they're charging that much, I don't think it's fair. Too much rehab and cost.

Edited Jun 26 2010, 09:24

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