can someone give me some advice on this??

Question

I found a Hard Money lender, but haven't contacted them yet do to the fact I don't want to sound dumb and very new. Can I get some advice on what questions to ask? How to approach them? Would it be ok to ask If I can defer the 1,000 dollar fee tell closing or ask if they require a monthly payment (it doesn't say it in there)

Thanks!!!!

Here is what they have for a program for fix and flips

Investor Fix & Flip

No QualifyingNo IncomeNo AssetsNo PointsNo Prepayment Penalty12% – 18% Interest Only*6 Month Term(Extension Provisions Available)Up to 80% Loan to Cost$1,000 Flat Fee

* APR 18.93% assumingloan size of $250,000

Ann Bellamy · Answer

Patrick, I wouldn't worry about sounding new, you're going to sound new no matter what.  So just move past that and ask the questions you need to know.  It is worse if you try to pretend you're experienced, because they'll be able to tell anyway.

Ask them to explain how the interest is calculated and when it is paid.  And if you don't understand the answer, simply say, "I'm sorry, I want to be sure I understand, can you explain that.  I've never borrowed hard money before."  They already know this by then anyway, but they don't know how much you do or don't know, so will simply use their own terminology.  If their terminology doesn't make sense to you, just say so.

If I were to call them, I'd ask the following, even knowing what I know:

• Can you explain the 12-18%, what are the factors that change the rate?
• If it is interest only, when are the payments due?
• Is the 18.93% APR based on an 18% rate?
• It sounds like this is not just simply interest due monthly, so can you tell me exactly how it works?
• When is the Flat fee of $1000 due, and what does it include?  Are there other underwriting fees, document fees, inspection fees, appraisal fees, or any other fees up front or on the back end?
• Can I use my closing company or must I use yours?  And if I must use yours, what do they charge for a hard money closing?  (Hard money closings, at least in my area, are much more expensive than conventional residential closings with an institutional lender.)
• When does the "Up to 80% cost" go down to 75% or 70% or can it go even lower?
• Will you fund any of the rehab?
• If so, how are those funds disbursed?
• What do you charge for an extension, and does the interest rate also go up?
• Will you roll the $1000 fee into the loan or allow it to be deferred to payoff?

I'm sure there would be more questions as we got into the answers, because the answers generate more questions.

Let me tell you, every time someone has given me information that was so over my head that I didn't understand it, and I was afraid to ask for fear of looking stupid, here is what happened:  If I persevered and ask anyway, either 1. they explained it using other words and it turned out to be something I already understood but didn't understand their use of the words, or 2.  It turned out they were trying to baffle me with bullsh*t and as a result they didn't succeed.

So ask.  Sometimes they will be helpful, sometimes they won't.  But if you don't ask, the answer is already no.

Ned Carey · Answer

No qualifying??? that sounds fishy to me.  Is this just s scam to get your $1,000?

As far a s trying not to sound like a newbie - don't bother. An experienced investor can spot a newbie within 5 minutes. If you try to be something you are not you will instantly loose credibility.

There is nothing wrong with being new. Just ask them how their program works. Like funding up to 80% of cost, is that 80% of purchase price or 80% of purchase & repairs?

Do you have a deal yet? Ask them about how they qualify the deal.  Do they prefer to get to know you ahead of time, or is their attitude "don't bother me until you actually have a deal?"