Does Being a G.C. count as Experience for Hard Money Loans ?

[Manuel Angeles]

This is a question to all of the hard money lenders :

If a Borrowers comes to you seeking a loan for a fix and flip,

and requesting high leverage (85% purchase, 100% rehab),

obviously you would need to vet Borrower's Experience.

What if the Borrower's Experience was being a General Contractor on their Past projects ?

If the Borrower wasn't on Title, or wasn't member of the Entities on Title,

Do You Approve the loan ?

How do you feel about Potential Borrowers coming to you with deals, 
But their Experience is only from being a General Contractor ?

Or their Experience was from 2005-2006 before the market crash ?

What is the best response to that ?

[Nghi Le]

I haven't seen any HMLs that will consider contractor experience. The reason is that it's not investment experience. As a GC, you don't run the numbers the same way as an investor would, you don't worry about purchase price and ARV, you don't worry about buying and selling properties, you don't worry about raising money, etc.

Generally, HMLs will only look at your investment experience (whether it be flips or rentals) in the past 2 years, not things from a decade ago.  And they can only count the ones where you were on title because that's something that can be verified from a reputable third party (i.e. county records).

However, you can still get hard money loans as a brand new investor, even at 10% down.  You just wouldn't get the best rates; it'd be somewhere around 12% and 3pts.