Questionable hard money lender advise

5 Replies

I was referred to a hard money lender by a real estate agent. He claims to have done over 600 deals. I've done some research and all I could find is that, he does have a website (with the name of the company on one page, that's it !!), and he is in good standing with the SOS. I may be wrong to assume, but with over 600 deals I would think I could find more info. He is asking 20% down on a 25k loan, and he wants me to have the title confirmed before he funds the deal.  The property was purchased through a tax sale by an investment company and I have it under a rent to own contract for 14.5k. The Arv is 75k and I really need to get this property on the market. I don't want the holding cost to eat up my profits. I'm already partnered on another deal and I'd like this one to be my 1st solo rehab. Any suggestions?

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@Mark Manson how are you affiliated with this company/lender that you advertise?

@Jerome Harrison So let me get this right. You have a rent-to-own deal where you can acquire for $14.5K. Do you have a tenant, or are you the tenant? You need (roughly) $14.5K to buy ... and the HML will lend you $25K with 20% down. So you need $5K, to borrow $25K. The proceeds will pay the rent-to-own deal ($14.5K) and surplus funds ($10.5K) will be used for repairs. Do I have that right?

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@Chris Martin Correct on the number's, but I am not the tenant nor do I have one. I plan to sale the property once I get the rehab finished. It will need a little more than 10.5k for repairs, but I will cover the rest. I've never dealt with a HML, but 20% upfront seems excessive.

In Texas they are doing 70% arv. 20% down seems a bit high for a hard money lender.

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