All Forum Posts by: Adam Farag

Farooq - owner occ is really difficult from a hard money perspective. We don't do it at Renovo and I don't know many that do. Also 12 months is usually top of the mark on timeline unless you are doing a million dollar project.

Chicago is a great market along with the many surrounding suburbs. Plenty of lending opportunities as well

Great to see the response folks! I'm starting to see more and more of these deals come through and will begin putting them out there with estimated scope of work and comps to support ARV's.

Just curious... How many investors out there are looking for bigger projects? Obviously there is a ton of competition for the standard 80k purchase, 30k rehab with 150-160k ARV. I come across more deals than I do buyers when I have a 300-350k purchase, 100-200k rehab with ARV's between 500-800k. I want to start sending some of these great deals out but would like to see what the interest is within this community.

Just curious... How many investors out there are looking for bigger projects? Obviously there is a ton of competition for the standard 80k purchase, 30k rehab with 150-160k ARV. I come across more deals than I do buyers when I have a 300-350k purchase, 100-200k rehab with ARV's between 500-800k. I want to start sending some of these great deals out but would like to see what the interest is within this community.

Welcome Matt. Are you looking for turnkey buy and holds? Or rehabs?

I work downtown off Franklin and Adams. Lend all over though

@Charles Worth - again, apologies for the delay.

I get what you're saying. A lot of HML's don't charge prepayment if projects get done early to incentivize the investor to finish quickly. Points in this game is a part of the cost to do business. You see points go down as construction budgets and timelines go up in some cases.

As for looking for lending based on profile and not project, looks like that is literally exactly the opposite of what @David Dachtera is looking for. That's the beauty of this business. When you create a box to fit people into it, it's very hard to be successful. When I look at deals I try to sketch out a complete road map for the thing. There's positives and negatives, not everything is a slam dunk. Let's look at it:

Credit:

Assets:

Income:

Experience:

Project:

Think of how many different types of scenario's you can place into those 5 categories. You HAVE to be willing to bend and flex. Think of great credit, assets, and income with a project with a smaller ARV and an investor with less experience. Then shake it up a bit and say credit isn't great, assets are low or average and income is middle of the road but the investor is seasoned and the project presented is an opportunity for a slam dunk. Maybe he's a guy that hasn't done this in a while and has just been sitting back like a sniper for a while trying to find that perfect deal and he somehow landed it under contract.

Lending in this business is different guys, every project, every investor, every situation is different. One of the things that makes it great.

Alrighty - apologies for the extreme delay in response here on my end but let me take a crack at it!

@David Dachtera - I don't think we are far enough apart that it wouldn't benefit to have a longer conversation. % of project that's financeable depends on you. There are creative ways to leverage some other assets and do 100%. Really just depends on the scenario. Don't want to try and fit anybody into a firm box, every deal is different. Points or interest rate, it's all the same thing. Close to 12% is doable but you're going to be looking at 3 points financed into the deal. Example - you want to borrower 100k (just picking numbers out of the sky) You're going to be paying interest on something about 103k at 12-13%. There isn't really money upfront. Everything is financed into the deal so the lender gets paid off upon exit. There can even be cases where 50-75% of the payments are included in the end payoff instead of being paid monthly. It's attractive to some investors and some not, just depends on your model.