INTRO TO PRIVATE MONEY

Many investors have questions about private money and what a broker can do for them. Well for starters private money is available to borrowers without a lot of personal requirements. You will need to be an entity, have some reserves for PITIA, can cover the first 1/3 to 1/5 of a rehab loan before reimbursement and have a rock solid scope of work and appraisal.

Investors ask about 100% financing. While it is out there it isn't often available to new investors without a lot of strings attached. You can get it eventually by becoming a seasoned, experienced investor. You can pay to become a student of many mentors or education companies or you can simply joint venture. It is more common for a loan to be 90% of the purchase price and 65% of the ARV. You can get 100% rehab but you should be expected to bring at least 10% of the purchase price plus closing costs to the table.

I work with a dozen lenders primarily and have a database of over 200 additional. These can be tapped for specific lending needs such as larger commercial or multi family deals whereas my primary lenders are generally residential single family and 1-4 units.

I encourage investors to obtain a Borrower's Checklist and Scope of Work from me and use these to "stack your loan" file. If you are prepared to submit all of the docs necessary for that lender it cuts down the approval and underwriting time considerably. My goal is 7 days to 3 weeks.

If you retain a broker you will sign a Client Fee Agreement. It should clearly state that the broker is paid on the HUD settlement sheet at closing by the closing agent never by you the client. Brokers charge 1-3% but if you think you will save that by not using a broker it amounts to what the lender pays for its internal staff to process your loan.

I will layout the typical loan process over about 8-10 posts. If you have any questions don't hesitate to contact me.