$100,000 unsecured personal loan with SoFi

Creative Real Estate Financing
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$100,000 unsecured personal loan with SoFi

Ben S.
Investor · Tampa, FL · Member since 2017 · 122 posts · 87 votes

I hadn't thought this was that exciting, but recently told a hard money lender about it, and he was shocked at the deal I got, so figured I would share it. SoFi (Social Finance) gave me a $100,000 unsecured personal loan at 11.74% with no other costs. My credit was good and I had a good paying job at the time, so that's certainly necessary. It's a 7 year loan, so monthly payment is a bit high. Compared to getting hard money for rehab cash though this is a pretty good deal (hard money I've been quoted for has been 3-4 points and 12-15%, and then you have draw schedules and inspections and stuff that can hold things up). I used it along with a couple unsecured personal lines of credit totaling $50,000 to rehab several projects in recent years (I think they ran about 12% interest as well). Most banks will offer unsecured personal loans and lines of credit I think, worth checking into.

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Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
Jay Hinrichs SoFI is an online bank that does personal lending, and residential (for owner occupant only) mortgages. For the mortgage you can get 10 percent down with no Pmi (so I assume your rate will be higher) SoFi works best for people wkth high credit scores and high income. 100k is the highest they go best to my knowledge
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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y

    wow spectacular what is SOFI ??? credit union bank ???

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    1Reply
  • Eddie T.
    Rental Property Investor · NY · Member since 2013 · 844 posts · 350 votes
    8y

    @Ben S. Which banks do you have personal Lines of credit with?

    0Reply
  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    8y
    Originally posted by @Ben S.:

    I hadn't thought this was that exciting, but recently told a hard money lender about it, and he was shocked at the deal I got, so figured I would share it. SoFi (Social Finance) gave me a $100,000 unsecured personal loan at 11.74% with no other costs. My credit was good and I had a good paying job at the time, so that's certainly necessary. It's a 7 year loan, so monthly payment is a bit high. Compared to getting hard money for rehab cash though this is a pretty good deal (hard money I've been quoted for has been 3-4 points and 12-15%, and then you have draw schedules and inspections and stuff that can hold things up). I used it along with a couple unsecured personal lines of credit totaling $50,000 to rehab several projects in recent years (I think they ran about 12% interest as well). Most banks will offer unsecured personal loans and lines of credit I think, worth checking into.

     Tell us more.  You just hit the Holy Grail of financing.  You use, not spend, this money correctly, and you'll make that initial cost completely insignificant. How do I get this?

    5Reply
  • Samantha Hiscock
    Investor · Barre, VT · Member since 2015 · 129 posts · 96 votes
    8y

    My husband got $60k unsecured from Sofi a few months ago for a rehab. It was so easy we should have requested more! It will definitely be our go-to in the future. No points, fees, and we had our money in about 72 hours after applying.

    5Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    8y
    Jay Hinrichs SoFI is an online bank that does personal lending, and residential (for owner occupant only) mortgages. For the mortgage you can get 10 percent down with no Pmi (so I assume your rate will be higher) SoFi works best for people wkth high credit scores and high income. 100k is the highest they go best to my knowledge
    8Reply
  • Jered Collins
    Johnson City, TN · Member since 2017 · 49 posts · 27 votes
    8y

    I used SoFi to finance my 1st fix and flip.  I received $87,000 at 9.25% for 7 years.  My credit and current job allowed me to go up to $100,000 if I needed more.  From start to finish with my money in my bank account, it took about 96 hours.  I will do business with them again.

    8Reply
  • Tae C.
    Flipper/Rehabber · Knoxville, TN · Member since 2017 · 130 posts · 72 votes
    8y

    @Ben S. @Jered Collins

    Are you having to pay monthly both interest and principal, or is it interest only with balloon payment at the end of 7 years?  Is it run like a line of credit or do you receive one lump sum of cash right away?  If the former, how do you get access to the cash (via checks/credit card/etc)?  This seems like a great option. 

    3Reply
  • Peter S.
    Attorney · Miami, FL · Member since 2017 · 108 posts · 113 votes
    8y

    I used it too. Got 50k in about a week. I should have asked for more.

    9.9 APR No points, no fees, no hassle. I'll definitely use again.

    1Reply
  • Steven Gesis
    Investor · Miami, FL · Member since 2015 · 1k+ posts · 390 votes
    8y
    Originally posted by @Ben S.:

    I hadn't thought this was that exciting, but recently told a hard money lender about it, and he was shocked at the deal I got, so figured I would share it. SoFi (Social Finance) gave me a $100,000 unsecured personal loan at 11.74% with no other costs. My credit was good and I had a good paying job at the time, so that's certainly necessary. It's a 7 year loan, so monthly payment is a bit high. Compared to getting hard money for rehab cash though this is a pretty good deal (hard money I've been quoted for has been 3-4 points and 12-15%, and then you have draw schedules and inspections and stuff that can hold things up). I used it along with a couple unsecured personal lines of credit totaling $50,000 to rehab several projects in recent years (I think they ran about 12% interest as well). Most banks will offer unsecured personal loans and lines of credit I think, worth checking into.

     Wow, nice job, very creative, kudos to you!

    0Reply
  • Jered Collins
    Johnson City, TN · Member since 2017 · 49 posts · 27 votes
    8y
    Originally posted by @Tae C.:

    @Ben S. @Jered Collins

    Are you having to pay monthly both interest and principal, or is it interest only with balloon payment at the end of 7 years?  Is it run like a line of credit or do you receive one lump sum of cash right away?  If the former, how do you get access to the cash (via checks/credit card/etc)?  This seems like a great option. 

     Yes, it's a P&I loan fully amortized to the seven year TTM.  It's a loan, so you request the amount you need and it is wired to your banking account.  

    3Reply
  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    8y

    I just took a quick look at this program. WOW!  I've been looking for something like this for a while now to replace a very similar program I used to use (until they stopped the program) all the time.  On the surface it looks expensive, but in reality this is free money.

    I'm going to direct all my partners (and future partners) to this site...after I explain to them how to use it correctly.

    Thanks @Ben S.

    5Reply
  • GC Vaghasia
    Norwood, NJ · Member since 2017 · 37 posts · 12 votes
    8y
    Excuse my ignorance, but what is the best way to use this type of loan? I'm just not sure how you would be able to utilize these funds if you have to pay P&I on a monthly basis. Can someone walk us through a possible scenario, please?
    0Reply
  • Seth HoehnPro Member
    Rental Property Investor · Saint Louis, MO · Member since 2017 · 4 posts · 4 votes
    8y

    Has anyone looked at (or worked with) Loanbuilder?

    They keep sending me direct mail, and claim to be very flexible on selecting how much you need and when so you don't have to carry a massive balance until you need it. 1 business day to get funds.

    I think they are owned by PayPal.

    2Reply
  • Peter S.
    Attorney · Miami, FL · Member since 2017 · 108 posts · 113 votes
    8y
    Originally posted by @GC Vaghasia:
    Excuse my ignorance, but what is the best way to use this type of loan? I'm just not sure how you would be able to utilize these funds if you have to pay P&I on a monthly basis. Can someone walk us through a possible scenario, please?

    Its an unsecured personal loan, you can use it any way you desire. Down payment on a new property, rehab costs, payoff of higher APR loans, etc. Similar to Lending Club, Prosper or the other online lenders, but their terms and rates are better. As the post above stated, its essentially a hard money loan but without underwriting, closing costs, ridiculous fees, etc.

    2Reply
  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    8y

    @Ben S. I have heard of SoFi, and those rates are great especially if you finish your project on time and I think they wouldn't charge a pre-payment penalty fee too. So, not bad when compared to HML. Thanks for sharing.

    0Reply
  • Darrin CareyPro Member
    Lender · Dayton, OH · Member since 2008 · 1k+ posts · 705 votes
    8y

    You should note the disclosure you need to sign:

    "By checking this box you certify that your loan proceeds will not be used to pay for post-secondary education costs, or to invest in real estate or securities. Except as detailed in this consent, the SoFi Personal Loan may be used for legal, personal, family or household purposes."

    Emphasis added

    7Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y
    Originally posted by @Darrin Carey:

    You should note the disclosure you need to sign:

    "By checking this box you certify that your loan proceeds will not be used to pay for post-secondary education costs, or to invest in real estate or securities. Except as detailed in this consent, the SoFi Personal Loan may be used for legal, personal, family or household purposes."

    Emphasis added

     well you know how many BP folks will adhere to that warning or stip  LOL.. .they will get the money and use it on real estate just like all that posted above.. If we think this through .. how are they to know.. that will be the first thought the borrower will have.. I suspect though if you borrow the money and have an issue as in you default and they sic the lawyers on you.. and they determine you violated the rules.. they maybe turn up the heat and get you for loan fraud which is not dischargeable in BK..   just thinking this through.. its like a cheap jump credit card and I am sure its for those with very good credit.. as a lender I wonder how long they are going to make it.. these kind of loans from the lenders side would be highly risky.. its one thing to do CC lending at 15 to 30 % interest and know your going to have a 10 to 15% default rate.. but to do this at these lower rates.. don't know.. But good points Darrin...

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  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    8y

    Sofi advertises as a way to refi student debt. Next we'll hear people are buying Bitcoin with these funds. 

    Good call on the debt not being dischargeable in BK, @Jay Hinrichs.

    Is Sofi publicly traded? Time to short it.

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    3Reply
  • Kevin Martin
    Jacksonville, FL · Member since 2013 · 226 posts · 116 votes
    8y

    I was looking into this recently as it looks very interesting. Another company I came across was LightStream that is through suntrust. Looks like similar rates, terms, and maximums as Sofi but they do make you specify what you are using the funds for that determines your rate. There is an option for home improvements which could be used for rehab costs on a property and it looks like you will get a better rate but it might be for owner occupants only. Either way all these programs are very interesting and really save you those crazy HML fees they get you on.

    1Reply
  • Tom GimerBusiness Member
    DMV · Member since 2017 · 3k+ posts · 3k+ votes
    8y
    Originally posted by @April Thibodeaux:

    There was a previous thread on this, where the borrower had made clear to the company what the funds were going to be used for and they said they worked with investors all the time, despite the stipulations on their personal and home loans. I'm going to try to find the thread.

    The link to the thread is here.

    LOL.

    Even the lender knows the rules are being broken.

    Remind you of anything?

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  • Cara Lonsdale
    Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes
    8y

    SOFI is one of many of these types of unsecured loans.  Prosper is another one.  LendingTree, Lending Club.....the list goes on. 

    It's a way of accessing money compared to a hard money lender, but I am not exactly sure why everyone is so excited about it.  11.25% isn't exactly something to jump up and down about.

    4Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y
    Originally posted by @Cara Lonsdale:

    SOFI is one of many of these types of unsecured loans.  Prosper is another one.  LendingTree, Lending Club.....the list goes on. 

    It's a way of accessing money compared to a hard money lender, but I am not exactly sure why everyone is so excited about it.  11.25% isn't exactly something to jump up and down about.

     well the fact that it cant LEGALLY be used for real estate seems like a moot point  LOL.. but as stated people will violate that every day and twice on Sunday not thinking any thing of it..

    and it gives the limited cash high Fico borrower access to cash that helps them with their projects.. just like the guys who go out there and charge you 5k to get you a bunch of zero interest credit cards.. and the CC know that many will not pay them off then they will go to the 20% rate and they have these folks hooked for life in perpetual CC debt.. LOL.

    I personally have bank unsecured LOC's of significant amounts but they are in the 5 to 6% range and are renewed annually with one point.. but they are not based on Fico they are based on tax returns.. solid earning good balance sheet and experience. so this sofi thing sounds like you need no experience no balance sheet no tax returns and just a good fico.. so you can see the appeal.

    And if you a small player doing a flip at a time I can see it  although your violating the stip..

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  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    8y
    Originally posted by @Peter S.:
    Originally posted by @GC Vaghasia:
    Excuse my ignorance, but what is the best way to use this type of loan? I'm just not sure how you would be able to utilize these funds if you have to pay P&I on a monthly basis. Can someone walk us through a possible scenario, please?

    Its an unsecured personal loan, you can use it any way you desire. Down payment on a new property, rehab costs, payoff of higher APR loans, etc. Similar to Lending Club, Prosper or the other online lenders, but their terms and rates are better. As the post above stated, its essentially a hard money loan but without underwriting, closing costs, ridiculous fees, etc.

     Actually, it's more than that...much more than that.  This is free money.  Yes, you read that right...free money.

    The explanation of this is a little long for this format, but I'll give you the highlights:

    1 - Because there is no collateral, when you flip the "cash like substance" (that's what I call it) through a deal, unlike a collateralized loan, you get the principal (this money) back...along with the profits.

    2 - ...to use again, and again, and again...

    3 - ...but you only payed for it one time.

    This is why I say, if you use (not spend) this money correctly, the initial cost is the ONLY COST...as in, you can have unlimited use...but only pay for it one time, and that one time initial cost is insignificant.  The more you use these funds over and over, the lower the cost per use becomes.

    It's the gift that keeps on giving...but your charge card only gets billed one time. 

    Now there is a trick, very simple, to using this.  That's where the "use it: (not spend it) correctly comes into play.

    8Reply
  • Cara Lonsdale
    Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes
    8y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Cara Lonsdale:

    SOFI is one of many of these types of unsecured loans.  Prosper is another one.  LendingTree, Lending Club.....the list goes on. 

    It's a way of accessing money compared to a hard money lender, but I am not exactly sure why everyone is so excited about it.  11.25% isn't exactly something to jump up and down about.

     well the fact that it cant LEGALLY be used for real estate seems like a moot point  LOL.. but as stated people will violate that every day and twice on Sunday not thinking any thing of it..

    and it gives the limited cash high Fico borrower access to cash that helps them with their projects.. just like the guys who go out there and charge you 5k to get you a bunch of zero interest credit cards.. and the CC know that many will not pay them off then they will go to the 20% rate and they have these folks hooked for life in perpetual CC debt.. LOL.

    I personally have bank unsecured LOC's of significant amounts but they are in the 5 to 6% range and are renewed annually with one point.. but they are not based on Fico they are based on tax returns.. solid earning good balance sheet and experience. so this sofi thing sounds like you need no experience no balance sheet no tax returns and just a good fico.. so you can see the appeal.

    And if you a small player doing a flip at a time I can see it  although your violating the stip..

     I don't know anything about them being illegal to purchase real estate.  They provide for a "big purchase" category, so I am not sure why they wouldn't allow for RE since there is more value to that then buying, say a car or a boat with it.

    Like you stated, money and credit are king when it comes to finance.  If you have good credit, you can get just about anything, so that is why I stated my surprise at people with high credit FICOs who entertain these 11+% interest rate offers when there are lower offers out there for them to trade their good credit for.  

    What's that old saying...The bank will lend you the money as soon as you show them you don't need it.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y

    @Cara Lonsdale  you did not read @Darrin Carey  post  these loans Specifically state the proceeds CANNOT BE USED for real estate investing or buying securities..

    so to do so is to violate the loan terms... (Stip)  and by doing that you put your self in jepordy  of a bad day on the legal front if you can't pay or are caught.. now frankly don't know how you would get caught other than non pay.

    I suspect the lenders feel to invest in securities and real estate is too risky.. And for some using the money for a flip and the flip flops like we know they can.. I can see that.

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