start in wholesale business but wondering

2 Replies

Are there any hard money lenders in ma that lend on the ARV compared to just LTV. Just wondering still a while away just wondering if they even do it in this part of the country's.

Private lending is a relational and case by case basis often.

HMLs are doing this professionally so they will have stricter guidelines but they aren't always going to be set in stone since, unlike a bank, they won't want to miss a good opportunity that doesn't fit a particular set of check boxes on a form.

That being said if you want to get a loan with minimal skin in the game you will have to have something amazing. If your purchase plus repairs is down around 60% of ARV (and that is THEIR ARV not yours, which may or may not be close) you might get people looking at lowering the amount of cash you need to bring.

You can also offer up something else. If you have other properties you can let them lien that as collateral instead of cash. Some might be happy with this others might not want to do that no matter how good the collateral is.

BTW not talking out my a$$ as the first Hard Money deal I did I got 100% of the purchase and construction funded, I only paid closing costs (Which with a HML isn't trivial). However the deal was awesome with purchase plus repairs only being 62% of ARV and I let him put a 1st position lien on another rehab I was doing without a loan (Unsecured loans up the wazoo, but no mortgages) that was worth at least $180K. So all I brought to the table was like $6,500 (plus the deposit on file) on a $110K purchase.

Typical stuff you see with 70% of purchase plus rehab costs would have meant more like over $40K with 30% down and closing costs. Also since I borrowed that closing cost money from a HELOC (or maybe a 0% CCard, hard to remember since I was "monetizing" my good credit like it was a job at the time:) ), it was actually a no money down deal.

Okay thanks for the explanation! Just wondering how that works.

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