All Forum Posts by: Doug Smith

Hi Kristin, Yes, I'm a lender, but I've also either built or flipped scores of homes over the past 15 years.Many of those we got from wholesalers in the Tampa area. We've met many, many wholesalers over the years, but there's been only one...ONLY ONE...who we found that we could trust. Everyone else that we've met has either A) never brought us a property after we first chatted , B) got super greedy and priced themselves out of having a great repeat relationship, or, more often, C) took us for fools and lied about ARV, the Extent of the Rehab, or some other important factor. On the front side, just be honest with people. "Through my business, I'm built very strong relationships with several investors and I really feel as if they would love this home." With us on the back end, we really appreciate honesty and trust. I suspect the same is true on the front end on the A to B transaction. Good luck in Houston!

My undergrad was in accounting. I did the CPA route and even worked as an accountant briefly before realizing I hated it and I went into lending. That being said, even I have a practicing CPA do our taxes. Laws change constantly. Asking that question of us in the peanut gallery is dangerous for you. You wouldn't remove your own appendix, so you probably would want to hire a pro to answer the question properly. 

I'm sure there are individuals that don't have experience with lending that have money burning holes in their pockets, but I don't know of an experienced lender that will do that. The risk increases exponentially when there's no skin in the game. Past also predicts the future...meaning that it's rare that you see someone with poor credit where it's an isolated thing. It's been my experience that credit issues are usually a pattern, so the legit lenders I know (including us) will look at someone's past payment history. One thing that was only mentioned briefly was experience. Most people don't understand that mistakes and defaults are inversely proportional to the operator's experience level. Heck, I had been lending for more than 15 years and had done thousands of loans before I did my first personal flip...and even I made mistakes over the first few deals. Most legit lenders I know, including us, are going to look at both cost and ARV in addition to other factors to determine how aggressive we'll get. We love to work with all the borrowers we can, but we also have to protect our investors.

Bulldozers have their uses provided the price and location are right. 

...and it happened in your neck of the woods. I won't mention names, but the offender is on your MLS!

Yep, Nate, that should have been how the closing agent handed over the check. The agent does a lot of business and I was shocked to see how she conducted herself. I've done a lot of loans over the years, but that was a new one to me. Hopefully nothing like that will happen to you and I in the Tampa market, but then again, this is the home of the Buccaneers and Gasparilla. You never know. 

Just PMd you. I do a lot of construction lending in the Tampa MSA and I've been investing for over 15 years. Love to connect. 

When I bought the home I'm currently in back in 2001, I was working at First Union (now Wells Fargo) and got the employee rate. People couldn't understand how I was able to get the amazing 7.25% rate I did. Rates right now are actually pretty good. It's real estate taxes, insurance, and the ratio of rents to property values that are killing deals in this day and age. 

So this isn't a question, but I thought some of you regulars would get a kick out of it. We also do consumer lending in FL and we had a closing in Orlando yesterday. The listing agent had been doing some inappropriate stuff throughout the process. Our closing went well, but instead of leaving a lock box on the house for the selling/buyer's agent or leaving a key with the closing agent, Long John Silver the Listing Agent buries the key in the front yard. Who does that? All is well. After taking 20 paces from the palm tree, then 10 paces North to the garden gnome, and some digging, they found it. I just thought it was too silly not to share. Happy investing everyone!

I don't know usury laws in SC, but you'll want to check the usury (highest interest rate) you can charge in SC. I'm sure you're fine and you're an individual, so I doubt if the state is going to come after you even if it is over the max rate in the state, but as the carpenter says "measure twice and cut once". Some states have really low maximum rates that you can charge. Keep in mind, you're talking about 20% for 90 days...that's 80% annualized interest. You don't want to give their attorney a defense if things go sideways. Does anyone know off the top of your head what usury is in SC? We don't do much business there and when we do, we're only 9-11%, so I honestly don't know.