Private Lenders

3 Replies

Hello Forum,

I am getting involved in real estate rehab/flipping houses business. I own a residential contracting company but I am ready to go to next level. I have contacted some private lenders in order to get some financing options and all of them are willing to borrow money. Terms are acceptable but all of the lenders that I have contacted are asking me for an origination fee upfront. 

I ask them to deduct that amount form the amount of loan but all of the ones that i have spoken to refuse to do that

I want to ask how is the normal (standard) procedure on this cases or is a rule of thumb that they all require an origination fee? Is that a good idea to do?

Thanks for any help or orientation

Victor Aponte

If it's your first deal with them and don't have a previous track record of rehabs I would say it's not unusual to require some cash up front. What type of LTV's are they lending on? Are they also financing the whole rehab?

I think @Matt Lineberger has some products that might work for you.  Maybe he can chime in or you can send him a message.  

If the value is evident in the real estate property and you have a solid plan for rehabbing and exit strategy you can find a lender who takes the points (fee) upfront. Show them you have a good property, good plan and are ready to execute.

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