...how much cash on hand are hard money lenders requiring, to do business with you..?
10% for recasa.
...hmmm, the last HML I talked to wanted 30k liquid.
maybe I was confused and they will consider investment accounts etc?
Roughly $30-40k for my lender when initially starting out.
It depends...Some will be ok with about 25k and will consider investment accounts. It all depends on which HML you are working with and how much red tape they will have. There are many HML's out there that I swear are a bank posing as an HML...what I mean is that some are about as conventional as they come and some are very loose. My suggestion would be calling at least 10 hml in Dallas alone and weighing them..
Oh back in the day when we made loans based on equity and even at that taking money out at closings.. investors would need NO money and get money at closing.
Well that did NOT work so well for us HML's so ergo you need to have some real cash for most lenders to play.
If your willing to do JV type deals you can get 100% if your qualified and experienced. For me I do everything from 80% of purchase and you do rehab. To I fund the whole marry ann.. just depends on where it is how much and how experienced the operator is and track record..
Its tough for someone with no track record no cash to get going.. contrary to what you will hear in the Guru seminars.. Not saying you can't pull it off but not the norm.
I flash back to one of my bizz partners in Honolulu they build High rises. They worked for Charlie Panko ( national builder of highrises) and wanted to go out on their own.. Well they had no bonding ability.. Well as province would have it they got a contract to build a big condo highrise for a Japanese firm.. the Japanese firm was paying cash 50 mil.. And did not know or realize what a bond was.. Based on that they were the winning bid built the building made 7 million and the rest is history they then had track record so they could get bonded ..
So in small ways if someone can get with just one vendor investor that you can get a deal done it can lead to experience and doing other deals.
This company US Pacific builders we did a few developments in ORegon and some timber deals. they ended up making a killing building resorts in Vietnam ...
What my post was meant to state was that it all depends on which HML he speaks to. You as well as I know that all HML lenders are not alike, for better reasons or worse. I am not saying to him that he does not need cash, his original question was whether or not they could take investment accounts in consideration. I just happened to expand on my experience in that some might as well be bank of America and some of them might as well be my uncle doing business out of his bedroom. It all depends who he talks to.
Agreed... my old company Silverado funding here in PDX. If you call and ask to make an app.. first thing you will hear is fine send 2 years tax returns credit app and do you have cash. and if you want a building loan the lot must be paid for free and clear an prove you paid for it...
That is what banks do.. but banks are still not really lending you need to be A paper have a ton of reserves and experience.. and even at that they may not lend to you. . I got turned down at one bank last Jan. I wanted 300k on a 650k value.. my bank did the deal but I was just looking to bring another bank in. I had 150k cash into this deal.. and they still would not do it.
My current HML didn't even ask about reserves - just looked at the property and said how much he'd be willing to loan. I had zero experience, but was working with someone the HML knew and trusted.
He's not a big institutional HML, just a guy who got tired of tenants and started doing loans several decades ago. If you find this kind of lender, the terms tend to be easier, I.e. @Onan Dumas 's "uncle".
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