Milton, FL · Member since 2018 · 34 posts · 8 votes
I'm currently flipping a couple houses in Pensacola, and would like to grow faster so I'm searching for private or hard money to free up some of my own capital for other projects. I would definitely prefer private money, but am open to hard money. I'm looking for about 30k to go towards rehab. I spoke with one HML and he said that he couldn't do less than 75k with 12% int. and 3 points. I'm not sure if this is pretty average or not, so I'm open to input regarding that as well. Thanks
How about using hard money to pull more than $30k out of one of your projects? Most HMLs I know won't do anything less than $50k but they will do purchase and rehab money. Send me a message if you want some contacts.
How about using hard money to pull more than $30k out of one of your projects? Most HMLs I know won't do anything less than $50k but they will do purchase and rehab money. Send me a message if you want some contacts.
It's tough to do anything less than $50k. Try financing both the purchase and rehab. Feel free to PM me for some HML contacts in FL.
Also keep in mind that when HMLs say 3pts, it's probably going to be more than that for these small loans since every lender needs to make a minimum fee (usually $3,500) to make it worth it for them to do the loan. Keep in mind that processing a $50k loan takes the same amount of effort as a $500k loan, but they'd rather choose the $500k loan to make more money.
The Smaller the loan amount the higher the rates and points will become with hard money loans. You should use them when you first find the deals so you can take full advantage of the funding programs that they offer.
I see this problem ALL of the time with my investors. That's why I push them to do our Unsecured Line of Credit/Business Credit Card program. They can convert some of these high-balance cards to cash from the $10k to $50k range, when situations like this arise, and regular HML's won't touch them because of the low loan amounts.
That’s good advice from Simmy. The only way to be free to leverage these smaller deals or deals that require a bit of creativity but don’t meet lenders requirements, is to get your business creditworthiness built up and apply for real estate lines of credit. Also, do it when you don’t need it so when you want to you can pull the trigger on a deal and not have it effect your personal credit. I’m glad I started with a reputable company years ago and not one of the many scams out there.
Hi @Thomas Dyman It will be very difficult to find an HML that is willing to do less then $50k. In this situation your best bet may be to obtain an unsecured line of credit(up to $100k) or possibly establish a self-directed 401 (K).
Please PM me for more details. You can also contact me directly at [email protected] or call 860-463-9948.