Autumnwood Funding

Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes

Has anyone used them? They are advertising in the Milwaukee area.

*9.95% Interest Rate
*Term of 12 Months
*Programs Available for Credit Scores of 640 and up
*Funding fee 3-5 points(3-5% of total funding amount)
*Joint Ventures Available

This seems really high compared to what you can get on Lending Club and Prosper.

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Account Closed

Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes

13y

Originally posted by Ibrahim S:

Originally posted by K. Marie Poe:

And now I can't get the mention function to offer up @Steve Babiak so we can call on his assistance. Sigh.

Yeah that happens to me too sometimes and I hate it......(won't even try now K. Marie - lol)

Ibrahim S Steve B. wrote to me and explained that the mention function only brings up names of participants in the thread AND collegues. Guess you've got to be colleagues with anyone you want the privilege of mentioning. Who knew? :)

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Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
13y
My general rule of thumb with all of funding companies is no fees paid until you fund AT CLOSING PERIOD.

Insurance fees, junk fees, commitment fees, due diligence fees upfront , etc. is all the same. If the lender feels comfortable they can fund the deal they should have no problem with the no fee requirement.

I do not know this company but I would ask them for recently funded deals and contacts for references.
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Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
13y
Of course appraisal, site inspection, etc. on a larger deal is expected to run into the thousands and is paid before funding. You want to make sure you pay the person directly so the services are performed and no puffing of the rates by the lender.
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William Bannister
Commercial Landlord · Oshkosh, WI · Member since 2013 · 299 posts · 88 votes
13y
I totally agree with Joel , I got burned by a few brokers back in the mid 2000's before the sub prime exploded. I think on one guy I had spent 275 on an appraisal and 40 on a credit report lucky I squashed the fees before they got any deeper but they wanted me to put up 1200. I flat out said no and I asked the appraiser to put 2 lenders names on the appraisal so I could use it with another lender if this broker fell through. Sure enough the broker tried to string me out. I always make them act fast or drop them like a bad habit. In this business if your shopping lenders you will get strung out a time or two before you learn how to stop that game from happening. Create dead lines for your broker to have a approval in writing.
Today lending is pretty straight forward. If they cant tell you if they can make a loan for you with a 40 dollar pull on your credit and you discuss in a 20 minute meeting the rest of your financials then probably they cant do the deal. I mean they still have to run the loans past underwriters but they should know what they can do or if they can make a loan. Lending criteria is stringent and they (brokers) know what the rules are.
I think if you are asked to put money up front to a broker besides the credit report often my bs flag goes up. I tell em put it in the hud 1 when we close or I move to next broker.
I paid 3000 for my appraisal on my 74 unit:) out of pocket before I closed.
That deal was a larger deal and I did it because it takes longer to get an appraisal like that one done so I had to have an appraisal done in time so multiple parties could shop the deal for my loan.

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Michael Quarles
Flipper/Rehabber · Bakersfield, CA · Member since 2008 · 3k+ posts · 3k+ votes
13y
William are you related to Roger?

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William Bannister
Commercial Landlord · Oshkosh, WI · Member since 2013 · 299 posts · 88 votes
13y
No lol
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Mike H.
Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
13y
Actually, their terms seem extremely reasonable for hard money.
10% for 12 mos and 3 to 5 pts. 12 mos is great for hard money. Typically its 6 mos. And 10% is a great rate.

I noticed on their website that they do 90 to 95% of the total project cost and that they do up to 70% ARV for Ohio and up to 65% ARV for outside of Ohio.

Thats a bit of a red flag to me that they are so open with the area that they lend. How do they check on deals outside of Ohio? Who does their rehab inspection?

That being said, their terms look good. They do have a $400 upfront payment but you have the option to pay by credit card or pay pal. Thats a little bit of good feeling considering that if they were scammers, you would be able to dispute the charge with the credit card company. The rehab lender I currently use has an app fee as well and theirs is more money but I've closed over 7 or 8 deals with them so I know they're good.

Never heard of this company but they seem to have quite a nice list of referrals and they did publish a ton of articles in their Ohio REI group back in the day. I'd check with some of the referrals and see if they add up.

All in all, I would say they would easily be worth doing more due diligence on because, from what I can tell, there doesn't seem to be any red flags there and their terms are actually quite reasonable for a hard money lender.

I'm actually going to consider following up with them myself.

And, btw, this may have been a real nice find so thanks for passing this along. I am always looking for more lending sources.

If you come across any lenders that can do 5-10 financing, please post that tip as well. :-)
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Mike H.
Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
13y
Looked a little closer at their website.
I noticed that for deals outside of Ohio, they're
actually requiring 20% down on the deal (purch plus rehab).

Thats still not bad given that a conventional loan
would be 30% down plus rehab out of pocket.

I also noticed that they mentioned a 5% share in the profits.
Thats basically an extra 5 pts that they're getting on the back end.
And they're getting that on the eventual sale price (I'm assuming).
I'm guessing on a buy and hold deal, they're just getting
the additional 5 pts. Very interesting how they left
that out of their main page but tucked that into a secondary page.

So, really, you're paying 10 pts and not 3 to 5.
Thats definitely beyond the high end if you ask me.
I've seen 6 to 8 or so but I've never seen anybody ask
for 10.

If you're in Ohio, though and can do a deal with 10% down of the deal price (purch plus rehab), its still not a bad way to go. 20% down plus 10 pts starts to be a bit high.
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Dawn AnastasiPro Member
OP
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
13y
If anyone, anyone can find a lender that does more than 4 mortgages per individual, I'd be grateful. I should start a new thread on that and post all the results on the ones who DON'T do it, so everyone can play process of elimination.
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Account Closed
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
13y
Dawn A. There are lots of good threads here already for funding after the first four properties. Commercial loans or local lenders keeping the loans in-house. Unfortunately, I'm not good with searches and links on BP.

And now I can't get the mention function to offer up @Steve Babiak so we can call on his assistance. Sigh.
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Ibrahim Hughes
Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
13y
Originally posted by K. Marie Poe:

And now I can't get the mention function to offer up @Steve Babiak so we can call on his assistance. Sigh.

Yeah that happens to me too sometimes and I hate it......(won't even try now K. Marie - lol)
0 Reply
Account Closed
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
13y
Originally posted by Ibrahim S:
Originally posted by K. Marie Poe:

And now I can't get the mention function to offer up @Steve Babiak so we can call on his assistance. Sigh.

Yeah that happens to me too sometimes and I hate it......(won't even try now K. Marie - lol)

Ibrahim S Steve B. wrote to me and explained that the mention function only brings up names of participants in the thread AND collegues. Guess you've got to be colleagues with anyone you want the privilege of mentioning. Who knew? :)
2 Reply
Dawn AnastasiPro Member
OP
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
13y
Well now I do! Thanks for the tip.
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Dell Schlabach
Investor · Canton-Akron, OH · Member since 2012 · 917 posts · 477 votes
13y
This is from Autumnwoods site ...

++++++++++++++++++

Interest only payments at 9.95% (guaranteed for new customers through 2013)

Total Closing Costs equal to 5% of funding amount + $1,200

+++++++++++++++++++++

So if I borrowed 100,000 for a project and paid them back in a 6 month period.

100k at 9,95% make it 10% for easy figuring =

5,000 interest for a six month period

5,000 in closing costs, WOW

1250 closing extra fee

400 processing fee

1500 = 5% of profits, at 30,000 profit

Thats 13,150 Interest

13,150 for six month = 26.3% interest .. little steep

Hmmm right now my "hardest" lender for this scenario would cost me 8,000. 9.95 and being in Ohio looked good until I started adding all the extras.
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Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
13y
The point is with lenders it's about the total cost and not the cheapest advertised rate.

If you are sitting on a few hundred k and want to throw them a bone of a 300 or 400 app fee and they burn you then it isn't going to take you under. If you have 8,000 to get started 400 can take a huge chunk of that so it's all relative.

I have seen lenders ask for 10,000 of thousands and higher upfront for larger deals. My point is total cost and no money paid out until closing. You get rid of almost all the scammers out there because you become too much work for them to scam.

From what is posted this other company sounds like they might be real but fees are higher than normal. Sounds like some HML companies structure to load beginning, middle, and back end fees to suck out most of the rehabbers equity. You can find much cheaper money elsewhere.
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Mike H.
Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
13y
The only problem I really have with those terms is the 5 pts on the back end. Thats just nonsense.

If they didn't have that, their terms would be reasonable for a hard money lender - even for a lender outside of ohio.

But when you start talking 10 pts total (5 on the front end and 5 on the back end) plus the 1250 for closing costs, I tend to question what they're doing.

To be honest, I've never seen any hard money lender ask for anything on the back end before. Interesting strategy.
I guess because it sounds a lot better than asking for 10pt on the front end - even though thats what they're essentially charging.

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Kim Knoppe
Private Money Lender · Lewis Center, OH · Member since 2013 · 3 posts · 0 votes
13y
In those instances where Autumnwood Funding receives a profit share of the project, the calculation uses the bottom line sales proceeds of the HUD1 less the funding amount due Autumnwood Funding. So on a deal that makes $12,000, a 5% profit share would be $600 to Autumnwood Funding, not 5 points on the loan.
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Steve Babiak
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
13y
Kim Knoppe - the forum rules require disclosure of any relationship or affiliation you have with companies that you speak for ... time to come clean here.
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Kim Knoppe
Private Money Lender · Lewis Center, OH · Member since 2013 · 3 posts · 0 votes
13y
I wanted to take a moment to clarify some questions raised on this blog concerning Autumnwood Fundings interest rate, upfront fees, and profit share.

In those instances where Autumnwood Funding receives a profit share of the project, the calculation uses the bottom line sales proceeds of the HUD1 Statement less the funding amount due Autumnwood Funding. So on a deal that makes $12,000, a 5% profit share would be $600 to Autumnwood Funding, not 5 points on the loan.

And, concerning the $400 up front fee, after an investor applies and is approved by Autumnwood Funding and after the investor commits to purchasing a particular property, Autumnwood Funding charges a $400 fee which covers the property evaluation and inspection. This upfront fee (the only one), is necessary because some investors decide not to close on their purchase after committing to do so and after Autumnwood Funding had expended time and money preparing for the closing.

Further, Autumnwood Funding's 9.95% interest rate is only charged during the time their money is used by the investor. If the project sells in four months, then only 4 months interest is charged. For example: $60,000 loan X 4.95% /12 months X 4 months = $1,990 total interest charged for the project. Interest only payments are due the 1st of the month by the investor. Interest for the month the project sells is prorated. It is important to note that Autumnwood Funding has charged this 9.95% interest rate for the past 2 years. It is not a teaser rate and any new customers are guaranteed the 9.95% for 2013.

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Chris Martin
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
13y
@kim I looked at your testimonials. I found one company who wrote a testimonial in public record (Franklin county) for DEED transfers (I think there were 7 total), but didn't see any liens or mortgages recorded. When you lend money, do you record in the county recorder's office? What counties have you lent in in Ohio?
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Chris Martin
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
13y
Kim Knoppe ... try again with the -at- thing...
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