"Rural property" private money/hard money

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"Rural property" private money/hard money

Justin Capps
Real Estate Broker · Indianapolis, IN · Member since 2016 · 32 posts · 12 votes

I've been speaking to a lot of hard money lenders and am finding out that lending too far outside of Indianapolis is a no go for many. Does anyone lend on rural flips? Comps are pretty strong in the area.

Home is in Rushville, IN

Purchase Price $165,000 smaller cosmetic rehab

ARV $275,000

I have experience flipping. 

Thank you,

Justin

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Craig Parsons
Contractor · Orofino ID, Hollister CA · Member since 2021 · 139 posts · 71 votes
2y

Yup I have had the exact same problem in rural and not so rural Idaho the hard money  guys have a very specific box and no matter the risk/reward they either wont lend or want you to have so much down that it makes no sense to even get a loan.  Personally I am trying to line up private lenders  but its still a tough road. The upside is once you figure out financing you will have an edge in an under served market.   If anyone else has lenders who will lend in a county of 8,000 people please shoot me a DM I'm always willing  to hear what some have to offer.

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  • AJ ExnerPro Member
    Lender · Springfield, MO · Member since 2023 · 663 posts · 320 votes
    2y
    Quote from @Justin Capps:

    I've been speaking to a lot of hard money lenders and am finding out that lending too far outside of Indianapolis is a no go for many. Does anyone lend on rural flips? Comps are pretty strong in the area.

    Home is in Rushville, IN

    Purchase Price $165,000 smaller cosmetic rehab

    ARV $275,000

    I have experience flipping. 

    Thank you,

    Justin


    Justin,

    I know of a group that could help with this, they (and other lenders I know who can work with this) sometimes will just add a point to the interest rate if the house is 'rural' or falls just outside of an MSA. If the comps are there, I don't think you would have a problem, especially with experience (the great equalizer).

    Just shot you a DM, would love to connect and help.

    [email protected]417-427-2612
    1Reply
  • Ryan Davies
    Investor · Salt Lake City, UT · Member since 2019 · 339 posts · 126 votes
    2y

    We know a few investors in the area. Do you own other real estate?

    1Reply
  • Craig Parsons
    Contractor · Orofino ID, Hollister CA · Member since 2021 · 139 posts · 71 votes
    2y

    Yup I have had the exact same problem in rural and not so rural Idaho the hard money  guys have a very specific box and no matter the risk/reward they either wont lend or want you to have so much down that it makes no sense to even get a loan.  Personally I am trying to line up private lenders  but its still a tough road. The upside is once you figure out financing you will have an edge in an under served market.   If anyone else has lenders who will lend in a county of 8,000 people please shoot me a DM I'm always willing  to hear what some have to offer.

    2Reply
  • Justin Capps
    OP
    Real Estate Broker · Indianapolis, IN · Member since 2016 · 32 posts · 12 votes
    2y

    Thanks for the replies. I do own other real estate. 

    0Reply
  • Dan BeaulieuPro Member
    Lender · Knoxville, Tennessee (TN) · Member since 2016 · 431 posts · 672 votes
    2y

    From the eyes of a lender: Rural is tough because there will be a lot less comps, less contractors, less buyers, potential well and septic problems, and also any acreage can skew the land / improvements ratio for getting the correct valuation. A TON of newer investors contact me with "deals" where the numbers look amazing but they were able to get it because they had a lot less competition for it...which should tell you everything. But, if you still must do the deal, private money is the way to go on those, and only a local would really understand the area and the market. 

    1Reply
  • Justin Capps
    OP
    Real Estate Broker · Indianapolis, IN · Member since 2016 · 32 posts · 12 votes
    2y

    Hey Dan, I understand your comment is a very generic statement that may not apply here. I've pulled 3 comps within 1/2 mile, under 10% gross adjustment in sq ft. with same lot size within the last 6 months. As a broker, I understand how an appraiser will evaluate the property. There's plenty of other comps a little further away but distance or age didn't make them ideal. I'm not a newer investor as I originally wrote. This specific deal was essentially handed to me by a family friend and after reviewing it over and over again, I can't pass it up. This home is only 30 minutes outside of Indianapolis but there's farmland in between and the town only has 6,500. That's why Longhorn won't touch it. It's USDA approved so I guess it's classified as rural. Funny thing is we have some suburbs of Indy that have portions of the outskirts of town that are USDA eligible. Oh well. I think I've got it figured out. 

    1Reply
  • Brandi K.
    Rental Property Investor · Member since 2018 · 56 posts · 38 votes
    2y

    @Justin Capps I've used DLP Lending for a rural hard money lender.

    1Reply
  • Bill J FayPro Member
    Lender · San Diego · Member since 2023 · 216 posts · 209 votes
    2y

    Good rule of thumb is at least 50k in metro population. With your track record and if there are solid comps, most HMLs should give your area a look. 

    2Reply
  • Abdiel Garcia Rodriguez
    Investor · AZ · Member since 2022 · 11 posts · 2 votes
    2y

    Hey Justin! I would love to connect with you! I am part of Pace Morby's Gator Method Community and can help with securing financing. Ill shoot you a DM!

    1Reply
  • Lauren Perry
    Realtor · Indianapolis, IN · Member since 2017 · 87 posts · 48 votes
    2y

    Have you tried CPL out of Carmel? They did a loan for me on a property between Avon and Danville that other lenders wouldn't consider.

    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2y
    I have done many JV deals in and around indy..  Kokomo  Shelbyville Rushville etc. 
    we dont lend we partner. 
    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    1Reply
  • Kerry Noble JrPro Member
    Investor · Indianapolis, IN · Member since 2018 · 3k+ posts · 1k+ votes
    2y

    @Staci Rogers can you do anything with this with your Remodel/Purchase product??

    2Reply
  • Craig Parsons
    Contractor · Orofino ID, Hollister CA · Member since 2021 · 139 posts · 71 votes
    2y
    Quote from @Abdiel Garcia Rodriguez:

    Hey Justin! I would love to connect with you! I am part of Pace Morby's Gator Method Community and can help with securing financing. Ill shoot you a DM!


     Aren't Gator loans  a very short term option?  From days to maybe no more than a month?  I will admit I am not a disciple of Pace's  but do follow along now and then.  Please help me understand.

    0Reply
  • Abdiel Garcia Rodriguez
    Investor · AZ · Member since 2022 · 11 posts · 2 votes
    2y
    Quote from @Craig Parsons:
    Quote from @Abdiel Garcia Rodriguez:

    Hey Justin! I would love to connect with you! I am part of Pace Morby's Gator Method Community and can help with securing financing. Ill shoot you a DM!


     Aren't Gator loans  a very short term option?  From days to maybe no more than a month?  I will admit I am not a disciple of Pace's  but do follow along now and then.  Please help me understand.

    Hey Craig! The Gator philosophy originated to provide shorter term lending by Pace Morby when he was a contractor. However, we encompass all aspects of lending in real estate, to include PML and HML. 
    0Reply
  • Griffin Hammell
    Lender · Nationwide and International · Member since 2024 · 8 posts · 1 vote
    2y

    Yes we do, please give me a call or text on my cell 720-635-6272 talk soon!

    0Reply
  • Simmy AhluwaliaPro Member
    Lender · Atlanta, GA · Member since 2015 · 1k+ posts · 200 votes
    2y

    @Justin Capps - we can certainly look at it. I just need the address and rental income. We have financed STR's in rural locations, so it can be done.

    0Reply
  • Jacob Sherman
    12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes
    2y

    yes definitely . 35%-40% down on the purchase 100% of construction . No income no doc 

    0Reply
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