All Forum Posts by: Brad Smith

Hi Ben--

While it's theoretically possible to reach your maximum with any source, even the ones that advertise no limit, it mostly depends on the house in question and your financial profile. For loans that I can fund, property values of 100K and up, credit score of 660 or higher and DSCR of 1.3 and higher can go into to mid double-digits of units before requiring consolidation.

Placing properties in a portfolio has its drawbacks, but also provides a lot of leverage to purchase more units.

Hope this helps!

Hi David--

Since most flips are short duration loans, interest rate is usually of much less importance than cash-on-cash return. For a first-timer with good credit, 11-12% and 2.5-3 points sounds about right. Other things you need to consider that are at least as important are: additional lender costs, max loan to ARV and max percentage of project financing.

Do the math.  Is a 10% rate on a 15-20% down loan you'll have for maybe 7 months better than a 12% rate on a 10% down loan in the end?

My primary goal is to maximize my clients' COC return while still offering fair financing terms.

Hope it helps!   

Have you asked about Seller financing?  You could offer above market mortgage rate to offset the zero down-payment.  After 6 months you could either try refinancing through a bank, mortgage company or with an institutional Private Equity lender.  Based on the estimated cash-flow, why not just flip it?

Hi Christine--

With 4 deals under your belt, 660+ credit and 75K or higher loan amount--90% Loan to Cost, 10% rate and 2.5% cost all day long.

Hi Femi--

You may only use the 203K on an Owner-Occupied property.  Not sure what your intentions are as you didn't indicate if this is a rental, flip or primary residence.  You're not likely to get a private loan on a primary residence either, as those loans are automatically regulated and most Private Lenders don't want regulation headaches.

If it's a straight flip, you can finance up to perhaps 90% of your project with a Hard Money bridge loan, but that may not jive with the Seller's stipulation for cash.

Hope this clarifies things a little.

Hi Jerry--

If what you mean is--Are there fully amortized (non balloon) as-is Rental Property loans that have longer than a 3 year fixed period?--- then yes they are quite common.  There are 3 yr, 5 yr, 7 yr, 8 yr, 10 yr ARMs and 30 yr fixed Private Equity loans available.  

If you are referring to bridge, fix and flip or other value-added repair escrow programs that offer a 3 year term, I doubt it.  I can go out to 24 months in some cases but it's rare when a value-added project takes longer than that.

Hope it helps! 

Hi Matthew--

Windsor Mill is in a strange area of Baltimore.  There are some no-so-great sections but also some very nice, suburban areas as well.  From what I've seen, rents are pretty strong in that ZIP code.  One thing the general locale (Northwest Balt City/Southwest Balt County) isn't experiencing is very high appreciation.  So you're probably in a long-term hold situation and hopefully decent cash-flow.

Hope it helps!

Hi Paola--

You mentioned you purchased the home in 2017.  What was settlement date?  If settlement was December 29, your first payment would have been Feb 1, 2018.  Even if house is uninhabitable your (6) escrowed payments would have been exhausted July1.  How long has this project been going on?  Unfortunately, the Lender didn't choose the Contractor, so can't be held responsible for their performance or any unforseen delays in the completion of your project.

You really don't want to go down on your mortgage payments, as it will be extremely difficult to get other financing down the road.  If this has already happened, you may want to consider selling at the as-is value and at least walking away with a tidy profit.

Hi Marilyn--

A 2.5% Lender fee isn't out of the ordinary, but should either be paid at Closing or financed into the loan amount.  Also, even individual Private Lenders should be able to provide you with an Estimate of Cost, Good Faith Estimate or pre-Closing Disclosure that you can present to your Title Company.  At Closing, your Title Company will verify that the Private Lender's funds are on deposit (likely wired) prior to any document signing or any money changing hands.  Any deviation from this process could well indicate a scam.

Hope this helps and best luck moving forward!

Hi Heather--

This is a pretty straightforward Rental refi that we do using non-bank Private Equity funding sources. There is no need to show any particular bottom line on tax returns, nor prove any monthly job income. As long as you can show assets in a domestic bank and your credit scores are in your indicated range, we can offer rates starting in the upper 5's . Rates/points are determined by LTV, credit score, loan amount and monthly cash-flow. Feel free to PM details for a best-efforts quote. Thank you.