All Forum Posts by: Arturo Herrera

I'm considering lending money to a developer to partially fund a new project. I have high level details on the project and think their terms (interest/timeline) are fair. This would be my 1st time lending money in any capacity.

1) Besides the lending agreement and Deed of Trust, any other agreements I should be looking out for?

2) As far as costs, what else besides legal fees to review the agreements should I be aware of?

3) Payments, how are these handled? Does the developer have all control in making and applying my interest payments or does a 3rd party usually do this? 

4) How does closing on the loan happen, similar to when we close on mortgages or do I just sign the agreement and done?

Appreciate any insight on this type of transaction. Open to hearing others experiences as well.

Coincidently I was hovering around the Louisville and Lexington MLS earlier today. I have no insight into either market (yet), but am also interested in the smaller apt space there. Approx 5-20 units.

I'll  continue to get a feel for the markets and if I decide to move forward, will keep you and whoever else chimes in, in mind. You never know..

Curious to hear other people's advice as I too am struggling this

I purchased a duplex in Ft. Smith right before Covid hit. Had to put 25% down, which was steep, but lenders weren't budging back then. So far, its been going well though (~11% cash on cash, $600 cash flow). Was a little hesitant b/c I really wanted to invest somewhere in the Fayetteville metro, but this opportunity came up so I jumped on it.  Now I'm re-focusing my efforts on smaller multifamily (4-12ish units) in NWA. 

Following as I would like to think, I may be in the same position one day soon.

@Jonathan Farber have you looked into any of the Fannie or Freddie Small Balance Loan Programs? Depending on loan amount, I've heard many people say those may be the best avenue for "smaller" multifam properties.

Blake with BC Landscaping did our backyard, concrete, and sod last Fall. Super knowledgeable guy, but his crew does get busy. We had to reschedule some things, but overall, we're happy with the job.

Hey BP - if you were ever a JV partner with a friend for your first deal (5+ units) and it was the first multifamily purchase for both, and could do it over again, what would be the top 2-3 things you would do or think about differently?

Any insight is much appreciated!

Arturo

Hey Odie,  preference is definitely to buy/hold a rental property. The lending idea I just came across, but something to consider in the future

Thanks  @Ryan Hall

Yes, I saw her post on FB a few days ago and decided to register.  Looking forward to it! 

Michael, thank you. I will keep those tips in mind. A lot of what you mention regarding thinking too much about the competition is my flaw.  I need to focus on my aspirations and strategy, which for the most part I am, but sometimes those negative thoughts creep up.  

I'm just getting the ball rolling and look forward to expanding on the little/general stuff I know.  Thanks again!