Lender recommendation for Houston area

7 Replies

Hi Bigger Pockets Family!

I officially upgraded to Pro immediately after sitting in on Brandon's webinar on Wednesday! It was great, very informative, and got the juices going to get deals.

Can someone recommend a lender that doesn't require too much upfront? I have come across a property where the flip margin is big enough to where 70% of ARV would be enough to fund the purchase and rehab cost. I have a lender who requires $1,200 upfront for inspection, appraisal, and attorney fees before they even consider lending. Are there any lenders that do not require this prior to "vetting" a deal?

Based on pre-flood comps, ARV for this property is high enough that it wouldn't cost me much out-of-pocket, but it is totally contingent on the appraisal. My concern is that I'd pay for an appraisal and then it comes back lower than it should be, and then I would be paying for a highly conservative appraisal, and incur more cost out-of-pocket than I would like to be. Are there lenders that do not ask for this payment upfront?

are you asking for a bank lender or private/hard money lender? 

Whichever that would allow me to use very little money out-of-pocket. I'm guessing that would be private/hard money.

Hello Minh,
I’m currently working with a HML out of Stafford that is charging 2 points, $1200 in nickel and dime fees, but is giving me 75% LTV of ARV at 7%. The kicker is it jumps to 13% at month 3 so rehab has to stay under 8 weeks. PM me if you would like their info and I’ll make the introduction.

Hi Minh,
I can definitely tell you that 9 times out of ten if you purchasing the home that you should get an appraisal. The value they provide is much greater than the cost.

@Huy Thai Thanks. I will PM you for more info.

@Michael Pittman I am 100% in agreement with you. I am not looking to bypass that whatsoever. Just wanted to know if there are any lenders that either do not charge for the appraisal, like the banks on HELOCs, or if they roll it all into the loan.

@Minh Le I know of a lender that only uses a desk top valuation. No appraisal. 70% ARV with 10% down payment. PM me if you would like additional details.

I think all HMLs will charge you for an appraisal up front, but normally that's not more than $500.  The rest of their fees should be at closing.  Banks that do conventional loans (and HELOCs) will also charge you for the appraisal before closing as well, unless they don't do an appraisal and only do a desktop valuation.

Also, a lot of people are mentioning 70-75% of LTV, but lenders usually want to see some kind of down payment too. Don't assume they'll fund 100% of your purchase and rehab. Usually I see 10-20% down.

@Huy Thai I've never heard of a loan program like that.  But something like that does make sense from a lending perspective.  Looks like they're able to win on both the points and/or interest (and high fees), no matter how long the loan is for.  Hard to do renovations and sell that quickly unless you're an experienced flipper.

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