Has anyone done business with David Garnaco

Question

I am looking at doing some private money lending with Garnaco.   The organization looks good, but we all know that looks can be deceiving.  My husband and I will be taking a ride out their way to look over a few of the properties and meet "the team".

Garnaco rehabs or upgrades properties, then rents them and offers the good tenants a pathway to home ownership. What the investors do is one of two choices.

Invest in the rehab or repair end or invest in the bridge loan after the property is fixed up or "stabilized" thru the period when the tenant gets their own finacing. Seems fairly safe and the rates are good. ( 9-11% depending on the type of investment and time frame)

Any experiences,  opinions or suggestions would be appreciated.    Thanks

Anne Jenkins · Answer

Thanks Jay, it certainly helps to hear it first hand from another investor.   Having done 50 deals and your extensive postings on Bigger Pockets verifies your credibility to vote yeah or nay.  From my phone conversations, his videos, and emails I feel very comfortable with David,   I also like his approach to the rehab or fix up of properties   That is, he doesn't just rip and replace , he evaluates what is good and works with it to suit the market he is working in.  I have seen too many investors create a truly beautiful property but a much higher end product that is out of the market norms cutting deep into their profits.

It is great to have this resource and thanks for taking the time to post and let me know.

Anne

Jay Hinrichs · Answer

I have done over 50 deals for Garanco good people every thing is first position mortgage with note.. as noted above by @Jeff S.

He has a very robust team that I also do a lot of business with.  Of course every deal is unique so do your due diligence.

Bottom line Garanco tic's the 3 Cs for me personally over the last 6 years or so of our business/funding relationship..   Character  Capacity Collateral.

Sarah Hessinger-Derryberry · Answer

@Jay Hinrichs

Jay, have you ever had late payments with Garnaco, and if so, how did you deal with them? I have been working with them for a little over a year and the last five months I have had to get in contact with them to get "caught up" since they will miss a couple of months and then pay up. I have tried email and Zoom calls but have not been able to get a straight answer as to what the underlying issue is which makes me automatically assume something shady is going on. At present, they're about to be three months late on payments for three separate notes and I keep getting told he "initiated the wire"...five days ago.

I like the mission of the company and I would really like to continue doing business with them, but having to take time out of my day on a recurring basis to deal with something that should be automatic is getting very frustrating.

Thanks for any insight you can provide!

Beth Johnson · Answer

@Hunter Kennell

@Jay Hinrichs certainly would be a credible referral as someone who's been in the business for a considerable amount of time!

I haven't invested with him but I do know him through mutual private lending circles and he's been doing this for a while now. I like the fact that he provides affordable housing opportunities for undeserved communities and many of his exits on the loans are said to be lease options for individuals and families who otherwise might not be able to afford or qualify to buy on their own.

The one thing I would suggest is to make sure you feel super confident not just with David but with his teams in market. He's based in the UK so he's not local to the markets he works in so you really need to vet their entire leadership and staff who manage the execution, not just the owner.

Jay Hinrichs · Answer

Your welcome the over improving the properties is rooted a lot with turnkey companies and brokers .. you know the granite and stainless and other higher end finish's that look great to an investor but really are not necessary for a renter..  so I get the value engineering these homes to fit the market and competition.

Jeff S. · Answer

I commend you, @Anne Jenkins, for meeting the rehabber and personally walking every property you lend on.  It’s a long shot, but you could own that property one day.  It’s also important to know who you are lending to.  I never heard of David Garnaco.  Just make sure he’s someone you like and are comfortable with.  This is exactly our process.

As important, and maybe it’s just how you wrote it, but you started off saying you are “lending” money and later changed that to “investing.”  Perhaps the same thing using a different word and, if so, that’s fine. (Some of our borrowers call us their investors even though I call us their lender.)   So long as you mean your name will be on the note and the mortgage at a sensible LTV, with proper lenders title, fire, and liability insurance, and so on, then you have safe and direct recourse to the property.

If by “invest” you mean a membership participation in an LLC of some sort that flips or “stabilizes” the property, then you are completely unsecured with no recourse to anything.  There are flippers who try to isolate themselves and their properties like this.  Unless there is a properly originated note and mortgage with your name on them, don’t even think about it.

Chris Seveney · Answer

@Anne Jenkins

I have spoken with him as I had him on a podcast. His business plan I like what he does. I have not invested with him so I cannot comment on how his projects have panned out.

I recommend asking him for some referrals from investors. Smart to go meet the team as well. Very smart

Anne Jenkins · Answer

UPDATE for you all.  I and lots of others are foreclosing on those mortgages Garnaco made.  I was in communication with David Garner who promised me over and over to make it right and blamed it all on Christine Hoffmeier .  But I am here to say, he's not on the up and up either.   Currently am having challenges with the foreclosure.  Anyone havening been successful PLEASE contact me.  Dont know if I can put a phone number on Bigger Pockets or if it is wise to do.  But here goes... 484-629-9199.  TEXT me first if you have info.  I often don't answer numbers I dont know.  Thanks   Anne Jenkins

Sean Bromiley · Answer

Hello Anne. I’m a general contractor who has had some success/luck investing in real estate. As a result, I’m scrolling through BP attempting to learn the money lending business.

I’m not suggesting this would insulate you from future experiences like the one you had with Garnaco, but hiring a legit general contractor on the front end to put some eyes on the project/budget seems wise. Possibly that is already part of your process.

Feel free to reach out in the future for my thoughts; in return I will ask for some lending advice from you.

Take care.

Has anyone done business with David Garnaco

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