Tampa, FL · Member since 2018 · 10 posts · 0 votes
My wife and I are newbies in this Real Estate investing and we are looking to rehab and sell properties. A HML is offering me 30% Down on a 150k Stated Loan with a possible 7 to12% interest loan. We currently have a low credit scores due to little to no credit history but have over 125k in cash reserves. We don't know if its a good deal or what questions to ask or what to look for. Can someone help us understand? We are very grateful for any advice. God bless!
Real Estate Investor · Tampa, FL · Member since 2017 · 31 posts · 10 votes
7y
@Ben Ortiz a good HML will charge 2-4 points.. normally paid upfront. LTV of 70-80% of the purchase price. If they offer repairs as well 80-100% of purchase price. Get the book the flipping blue print by Luke Weber. Very good book for beginners. Also I see you live in Tampa. I also live there. You should check out the local REIA meetings.
Lender · Grand Rapids, MI · Member since 2018 · 703 posts · 446 votes
7y
Sounds good, I would give him a try. One last thing, check to see how much apprasial fee is and make sure he's not charging any crazy doc fees or because you have purple socks fee, or doc fee or some other crazy fee.
Tampa, FL · Member since 2018 · 10 posts · 0 votes
7y
@ Tamatha, Thank you so much! I will get the book. Yes, I am a member of Tampa Bay REIA and attended my first meeting Monday. It was awesome and I'm excited about this venture. Hopefully you and I can meet one day. Thank you for taking time on helping a newbie like me :-)
Real Estate Agent · Tampa, FL · Member since 2018 · 18 posts · 6 votes
7y
As a loan originator and investor-friendly agent, I see a lot of my investors use a variety of lenders and mortgage brokers. I would look into a lot of the fees/points. I just had one of my experienced investors use a new mortgage broker to get him a loan. The mortgage broker took 2 points and the lender took 2 points, that was nearly 12k. There's a lot of junk fees that get added in as well. Also make sure you factor a flood insurance policy if the home is in a flood zone. You can do your different research with lenders but if you have some friends that flip, I would ask them who they've had a good experience with. I noticed investors have a tendency to go with the cheapest lender they find however that doesn't always mean their the best option. Some can be a real pain and pull "stunts" before closing... Feel free to message me if you have any questions!
Rental Property Investor · NC · Member since 2018 · 776 posts · 776 votes
7y
@Ben Ortiz ask for a copy of the loan documents they make you sign at closing. You will be surprised of all the additional fees they will try to squeeze in there. Get any fees, payments, and closing costs in writing. I paid 11% and 2 points for my first HML. It was 80% total cost (purchase and rehab). I had a good credit score.
My wife and I are newbies in this Real Estate investing and we are looking to rehab and sell properties. A HML is offering me 30% Down on a 150k Stated Loan with a possible 7 to12% interest loan. We currently have a low credit scores due to little to no credit history but have over 125k in cash reserves. We don't know if its a good deal or what questions to ask or what to look for. Can someone help us understand? We are very grateful for any advice. God bless!
Hey Ben
30% down is normal for your first deal. You should be able to nail down the interest rate a little better. It sounds okay, but remember, never pay any points up front. Lots of scammers out there. Real lenders get paid on performance, not by taking people's application fees. The only thing you should pay out of pocket would be a fee that goes toward the appraisal or credit report.
Your reserves seem fine because you'll probably need 3 month's PITI. You will probably need a 600 credit score as well.
Tampa, FL · Member since 2018 · 10 posts · 0 votes
7y
@Stephanie P. @Frank Geiger, thank you so much! I will absolutely check the loan docs for crazy fees. Awesome advice!! I'm forever grateful for your help. God bless you all :-)