BiggerPockets

We have a small deal under contract and figured it would be a great opportunity to start a long term relationship with another private or hard money lender.

Purchase Price: $30,100

ARV: $119,000 (150 sq ft addition)
Recent comps available upon request
*All comps sold within 6 months, under 0.4 miles away (most on same street)
*High development area

Rehab: $45,000 max (6 month total loan max, rehab under 4 months)
*Green rehab features will be included, benefits are faster selling time, alignment with your personal values

Quiet costs: Approx. $14k - $17k

Rates: Looking for flat simple interest of 12-14%, no prepayment penalty, 6 month terms. Higher rates reserved for larger loan sums. All negotiable BUT one thing I ask is that you MUST be looking for a long term lending relationship. Our goal is to immediately roll your funds into a new deal right upon completion of this one.

Detailed investment summary available upon request as well as investment history of previous deals.

Message me here, reply to thread, or email me at my personal email below.

Thanks,

Glenn
Fresh Start Homes, LLC

I suggest you look for better borrowers, Eric.

My inclusion of max cost and max time is to protect my lenders. Anything above and beyond those figures has and always will be covered by myself and my company. We have enough contingency funds and reserves built in for every deal so that we are never running back to the lender requesting more money. Would you rather a borrower requests money with an open time frame and an open rehab budget?

As for how much we are requesting, the title stated $30k - $75k with higher rates reserved for investors looking to fund more of the deal. The more money I can borrow the more I am willing to pay as it keeps my own funds liquid and allows me to look for more deals.

Thank you for the comment,

Glenn

@Jon Holdman, I am located in Norfolk, Virginia, as is the property.

I am familiar with the deed of trust process and I may have misstated in my original post regarding recycling of funds as I did not mean to imply keeping funds in between deals. My goal would be to identify a deal as the first property comes under contract so that there is as little gap between deals as possible. The first transaction will be completed prior to any re loaning of funds.

Of course, lenders are not tied to this process and can opt out of the next deal for any reason.

Thanks for the clarification, Jon.

Glenn

What about points, are you willing to pay points in addition to the interest?
When is your closing date?
Are you prepared to provide bank statements proving reserves and capital for rehab along with corporate docs?
Who besides yourself is part of the company guaranteeing the loan?
Are you all willing to sign a personal guarantee and prove assets?

Quite enjoyed reading Will's questions since they get at some of the worries of a person who is interested in this idea of earning that kind of return (well, comparing it with CDs, stocks, bonds, etc not comparing it with an average flip or anything in this "real estate" category.
And @Glenn Espinosa, good job man. Your website looks good, and your goal of doing good while doing well is admirable. I can appreciate your request/parameters and if I had the money at present, I would probably be quite interested. I am kind of on my own journey re: developing expertise in finding/buying/flipping or holding SFDs and so I'm afraid any dollars I may liquidate from a condo I have that is underperforming will need to go to that. I'm kind of in the same shoes as you more than I am a viable lender.

OK this reply is dragging on: I wish I could help. In a few years I imagine I could, and if your reputation is still solid and you have similar needs we might could work together in the longer-term wya you suggest. I'll end with that.

Glenn have you landed any contacts from your local real estate association there for lending money?? Not the HML's but people with private capital.

It's the ultimate problem for flippers. Flips are getting thinner as more rehabbers enter the market. To preserve margins rehabbers are searching for private capital with no points and a lower interest rate.
High interest rates and points take what little meat is left on the bone for rehabbers these days.

HML's want a seasoned rehabber but still want to churn points and loans for volume. The ones willing to pay the higher rates are often the inexperienced and the most risky for a HML lender. So what everyone wants is usually at odds with each other. Same tale with buyers and sellers in that people have to find the common ground that works for both parties to consummate a deal.

I have looked at HML lending and other types of RE investing but I have not found a greater return for me than doing mailers and closing more commercial sales as a broker. From one 50 cent mailer I can generate sometimes a 40,000 commission or greater from a listing. So I just haven't found anything that comes close to that kind of return. I don't like with HML that your funds aren't liquid and all these things can happen where you don't see the return and it takes awhile to get your money back again. I think locally you might have some luck farming for capital. They are just changing the advertising rules recently so that is good.

Congrats Glenn. I reviewed your docs and your resentation sent. I must say that for someone with limited experience, your packet is the most professional I have come across. Kudos for putting that together.

Though I am late on this deal and you appear to have funded it, I do look forward to speaking with you in the near future on additional projects.

-Will Barnard