Do private lenders/HML do 30 year loans?

Investor and Architect · Ramsey, NJ · Member since 2010 · 305 posts · 84 votes

I know private and HML do short term loans to have permanent financing put in place by a bank after rental is renovated/stablilized.

Do private or HML also provide permanent financing such as a 30 year mortgage. If yes, what are the rates?

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Bryan L.

Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes

12y

I once loaned a friend $1500 and I expect that I will never see a penny of it back. So that's theoretically an infinite number of years I guess.

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Account Closed
Real Estate Investor · Chicago, IL · Member since 2008 · 1k+ posts · 218 votes
12y
I have yet to meet anyone willing to go that long term that would be defined as HML/Private

I have one Private lender at 5 years. That is it..
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Jeff Rabinowitz
Investor/Landlord · Farmington Hills, MI · Member since 2011 · 1k+ posts · 1k+ votes
12y
Anyone can be a private lender and every lender's goals vary. Most of my current notes have terms less than 6 months though I do have a couple 5 year and a couple 3 year notes. My first private money deal was selling a home on a 15 year land contract. That loan was paid off in approximately 7 years. It will probably be more difficult to find a private lender who will go 30 years out but if you offer a well secured, high yielding investment it is not impossible.

The rate will be whatever you and your lender agree to.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
12y
@Larry K. hard money is far to expensive for 30 years its only meant for short term allow you to get in and get out
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Bryan L.
Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
12y
I once loaned a friend $1500 and I expect that I will never see a penny of it back. So that's theoretically an infinite number of years I guess.
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Sharad M.Pro Member
Carlsbad, CA · Member since 2010 · 1k+ posts · 1k+ votes
12y
Hi @Larry K.

As for what rates and terms you can get, it depends on what you can negotiate.

I have couple of private money loans for 7 years and I have one 15 years fixed at 5% for a seller financed loan.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
12y
@Bryan L. and what about loans to our children ??
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Duncan Taylor
Real Estate Investor · Member since 2013 · 866 posts · 487 votes
12y
As Jay pointed out, even if they would, you wouldn't want it because of the cost.
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Duncan Taylor
Real Estate Investor · Member since 2013 · 866 posts · 487 votes
12y
Originally posted by @Jay Hinrichs:
@Bryan L. and what about loans to our children ??

I don't even pretend the money I give to the kids and grandkids is a loan anymore.
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Sharad M.Pro Member
Carlsbad, CA · Member since 2010 · 1k+ posts · 1k+ votes
12y
Originally posted by @Bryan L.:
I once loaned a friend $1500 and I expect that I will never see a penny of it back. So that's theoretically an infinite number of years I guess.

Is that still considered a loan or is it a bad debt now? lol
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
12y
@Duncan Taylor @Account Closed

Duncan I see you were in Washington before GA.. where were you at.. I am in PDX and have done a few deals in WA. why did you leave our beautiful rain forest?... any high line projects I would know about?
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Account Closed
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
12y
I know some HMLs in my area that will (still) happily write interest only loans for 30 years. And happily take the property back when you don't pay too. When the loan to value ratio is right, they're happy to keep the loan out there forever, or until you don't pay.

The old school hard money/equity lending business model is low loan to value/high interest rates for however long they can keep the money working. True equity lending. This is not to be confused with the newer breed of rehab/flipping lenders that call themselves hard money lenders. That group wants their money back in 6 or 12 months and analyzes the deal from a short term gain perspective.

One of the HMLS in my area has a guarantee that says if you pay them back in 90 days they will refund all the points and fees. During the Bubble I bought a property and borrowed from them, and then resold it. My escrow company managed to close both escrows in less than 90 days, while I was out of the area with no internet or cell for 10 days. When I got back, the lender had sent me a copy of the loan release and a note that said I was the first person in 30 years to pay them back within 90 days. That was transactional lending before I even knew it was called that.
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Duncan Taylor
Real Estate Investor · Member since 2013 · 866 posts · 487 votes
12y
Originally posted by @Jay Hinrichs:
@Duncan Taylor @Account Closed

Duncan I see you were in Washington before GA.. where were you at.. I am in PDX and have done a few deals in WA. why did you leave our beautiful rain forest?... any high line projects I would know about?

Nothing high line in WA or the states. I always wanted to but it just never came together for me. Mostly apartments and mid-rise office space in the US.

I still have a house in Kenmore right on the lake. I can't imagine selling it my best friend and personal lawyer lives next door.

I grew up in Tacoma and will always love the PNW. But, my wife grew up in Raleigh and the younger grandkids all live here in north GA now. So, since a happy wife means a happy life I decided it was easier to just move here. We were putting way too many hours on the G4 going back and forth.

We are in Duluth, GA while the house on Lake Lanier is being finished. I have to live on the water and near a golf course. A golf course on the water's edge is heaven to me. A gun range I can easily get to a couple of times a month is a must too.
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Account Closed
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
12y
Originally posted by @Larry K.:
I know private and HML do short term loans to have permanent financing put in place by a bank after rental is renovated/stablilized.

Do private or HML also provide permanent financing such as a 30 year mortgage. If yes, what are the rates?

Here in CA it's become a thing for private money and hmls to lend longer term to landlords at 9%. I've seen 5 and 7 and 10 year balloons on those.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
12y
@Account Closed is that Bruce Norris product.. I know he has a mid term private money offering?
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Account Closed
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
12y
Originally posted by @Jay Hinrichs:
@Account Closed is that Bruce Norris product.. I know he has a mid term private money offering?

I actually heard about it first from an investor friend in VA. She and her partner stopped doing rehabs in 2008 and started lending to local landlords. Since then I've met a few lenders placing money at 9% longer term and I've heard that the Norris Group does something similar, though not sure of the details.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
12y
@Duncan Taylor

@Duncan Taylor

@Duncan Taylor

Duncan... I just got to ask.. .. As a private pilot and aircraft owner ( cirrus sr 22) I know a little about aircraft. and what I know is a G 4 ( Gulfstream to those who don't know) is a 10K an hour plus bird. Flight from SEA to ATL is 2500 miles and about 4 hours going east bound so 40k one way for that baby.

why in gods green earth would someone who could afford to own or fly a 20 to 40 million dollar aircraft spend 20 seconds on BP with all the newbie wannabes and others..( I do not mean that condescending of the folks here trying to learn and improve their lives) but I have travelled in the circles that one would be in to own or be able to fly in that kind of aircraft and those folks would in no way be spending as I said any time on this site.. I have stayed and played golf at Augusta, ( Ron Daniel COO of McKinsey was my host and is my business partners step dad) and his buddies travel in G 4 's.. Having lived in the Napa valley for all the years I did I had a bunch of other Jet set friends.

So I can name drop with the best of them... and what I can't still understand is what would someone like you be doing here.

I know why I am here I got hammered in 08 to 2010 in the down turn. I was never a huge player but I did pretty well better than most and I am coming back and I like to impart my experiences. which are REAL and in the trenches.

Anyway just very curious as I said what someone of your financial clout would be doing here in BP
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
12y
@Account Closed Norris has a ( and I think this is right ) 7 year program at 8% with 20 or 30% actual cash down Not LTV but CTLV.... I do this type of lending in the mid west and south east but I require 50% CTLV.. ( not trying to sell my services FYI)
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Duncan Taylor
Real Estate Investor · Member since 2013 · 866 posts · 487 votes
12y
Originally posted by @Jay Hinrichs:
@Duncan Taylor

@Duncan Taylor

@Duncan Taylor

Duncan... I just got to ask.. .. As a private pilot and aircraft owner ( cirrus sr 22) I know a little about aircraft. and what I know is a G 4 ( Gulfstream to those who don't know) is a 10K an hour plus bird. Flight from SEA to ATL is 2500 miles and about 4 hours going east bound so 40k one way for that baby.

why in gods green earth would someone who could afford to own or fly a 20 to 40 million dollar aircraft spend 20 seconds on BP with all the newbie wannabes and others..( I do not mean that condescending of the folks here trying to learn and improve their lives) but I have travelled in the circles that one would be in to own or be able to fly in that kind of aircraft and those folks would in no way be spending as I said any time on this site.. I have stayed and played golf at Augusta, ( Ron Daniel COO of McKinsey was my host and is my business partners step dad) and his buddies travel in G 4 's.. Having lived in the Napa valley for all the years I did I had a bunch of other Jet set friends.

So I can name drop with the best of them... and what I can't still understand is what would someone like you be doing here.

I know why I am here I got hammered in 08 to 2010 in the down turn. I was never a huge player but I did pretty well better than most and I am coming back and I like to impart my experiences. which are REAL and in the trenches.

Anyway just very curious as I said what someone of your financial clout would be doing here in BP

That's a fair question.

Last fall I underwent double knee replacement surgery. I had it done here in GA and was laid up for a while. I found this site because of a search I ran to vet the contractor we are using on the lake house.

I read here for probably a week off and on and eventually jumped in to answer a question. In these newbies I see a lot of memories when I was starting out long ago. I fell for some of the guru claptrap and paid my stupid tax.

I'm not here to do deals. I'm not here to sell anything. I am here way too much.

But, looking back 36+ years, as hard as it was getting started it was a lot of fun too. Everything was new. There were new things to learn and new ways to put things together. For the newbies, I say enjoy it because if you succeed it will lose some of its charm. It won't suck, I'm not saying I want to be broke and starting out again, but there were lots of good times in there too.

Yeah, the cost was my motivation to move here. But it is nowhere near $10K an hour without the cost of the plane. Crew, attendant and fuel averages closer to $3k - $3.5K an hour. My hanger cost here in GA is lower than I had in WA. But it is up near the lake house not here in the metro area.

I'm happiest, cost wise, when a trip is at least mostly business related though.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
12y
@Account Closed I have heard a lot of things but never have I heard of a HML not getting paid... when I was rocking 2002 to 2008 my average turn time was 93 days on my loans. Nothing new about 6 to 12 month loans we have been making them from when I first got into RE back in the mid 70's and my dad was doing them in the 50 's and 60's
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
12y
@Duncan Taylor your a retired real estate philanthropist then :)

3500 an hour is CJ 2 or Cj3 type of bird.

I know I spent 400 an hour on my lowly cirrus.

I played golf a few years back at the Madison club. in Palm springs ( LA guys will know this one) and we were guest ( they thought I could afford a 2 million dollar lot) when in fact my partner he could but not me. Any way we played with the junior partner at Schwab and he still had his original jet it was a Saberliner. You could buy those for 1 mil but they suck the gas and were hanger queens that took all sorts of maintenance.

On my trip to Augusta we got to play East Lake as well, I was the guest of Southern distributing. Then we went over to Augusta and we stayed 2 nights in the Butler cabins and played golf for 3 days. there were only maybe 5 to 10 groups out each day ( this was late Oct. weather was perfect) It was cool though we ate at the club each night and the CEO of Toyota was there and his guest was Keith Jackson the sportscaster. When we went through the mens locker room the names on the lockers where the who's who of corporate america. the only Athletes that are members are Palmer and Nicklaus. and these kings of industry have to share lockers.. But Owe the wine cellar. first growth French and the best Napa.. Screaming Eagle and all the rest.
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Duncan Taylor
Real Estate Investor · Member since 2013 · 866 posts · 487 votes
12y
Originally posted by @Jay Hinrichs:
@Duncan Taylor your a retired real estate philanthropist then :)

3500 an hour is CJ 2 or Cj3 type of bird.

It's tax season and we just went through these numbers for last year.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
12y
@Duncan Taylor what your tail number..

Mine is N282CD this one I bought new in Duluth MN and flew it home from the factory that was a proud day indeed for me. . and then I bought a second one N277TT that one I sold in 2009 to a travel agent in Canada. 282 resides at Aurora Or... Aurora partners LLC>

I love to fly and I can say without any question that flying in the US is the best in the World.. Just like owning real estate nothing more free than what we have here.

next time I am in GA you can take me for a spin in your Jet :)
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Duncan Taylor
Real Estate Investor · Member since 2013 · 866 posts · 487 votes
12y
You got it.
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Account Closed
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
12y
Originally posted by @Jay Hinrichs:
@Account Closed I have heard a lot of things but never have I heard of a HML not getting paid... when I was rocking 2002 to 2008 my average turn time was 93 days on my loans. Nothing new about 6 to 12 month loans we have been making them from when I first got into RE back in the mid 70's and my dad was doing them in the 50 's and 60's

You couldn't be as experienced as you appear if you've not seen HMLs lose money. Lots of hmls lent on junk at the top and got it back at 25% of loan value. Lending at 65% of value couldn't account for the crash. In one of my farms, there are several hml brokers who put together multiple private money pools for construction loans. They lent at the top in 2007 and by 2009 the builders had defaulted on everything. The investor groups got the properties back and are still holding them (vacant land and partially finished custom homes), in hopes of being made whole. The investor pools include waitresses who contributed $2500 and and retirees who used $200K+ of their pension plans.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
12y
@Account Closed you stated that the lender would not receive any points or interest if you paid off prior to 90 days that I have never heard of.

did lenders lose money F ing right they did and I was one of them. Lost millions in the 07 to 2010,, wholesaling my OREO at one point I owned more than 200 homes all upside down. I stop counting how much I lost. but at the end of the day I made it through without BK or losing the company like most HML did and most builders as well. and we are back on track to making some good money these days.. and much wiser.. the day of the investor having no skin in the game is a thing of the past.. My 50% down NON recourse loans are going great I did well over 150 of those last year... and it continues to grow and the SDIRA borrower is underserved in my opinion as well as the Off shore investors. half of my loans are to AU and Singapore investors.

Lastly thats why 07 to 09 was the great GFC it effected most everyone in and around real estate. those that are just now starting out are doing well because they bring no baggage forward.
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