All Forum Posts by: Coral Hernandez

@Adam Garner

Hey I know of a Lender who is still active. And is not killing deals.

@Brad Sparks

Changes will occur in Underwriting when it comes to the risk part. But regardless the lending will go on.

Hard money: “The Pro’s and Con’s”

Pro

• All CASH Transaction
• Quick Closing Times (<14days)
• All “Rehab Cost” are covered in Loan
• Lower Leverage for Buyer and more Liquidity
• Flexibility to buy Distressed and Value-Add Properties 
• Loan based on Property and underwritten so Borrower is Profitable
• Does not show up on Credit Report
• No "DTI" (Debit to Income Ratio)

CON

• Higher interest rate than Bank
• Shorter Repayment Schedule (<12 months)
• More conservative evaluation of the Property’s Value 
• Not doing your research and working with a “Bait and Switch” Lender (check out our post on this) 

    Real Estate is one of the most dependable and powerful ways to grow your wealth. Shake off the Stigma of what you might think a Hard Money Loan is, and do your research. 

     How successful do you want to become? The FNMA (Federal National Mortgage Association, aka Fannie Mae) only allows up to 10 mortgages. 

     So, what are you going to do, stop growing your Empire? No. You’re going to seek out alternative financing and lending. And that is where your Hard Money Journey will begin, if not sooner.

    Learning how to use O.P.M. ( Other People’s Money ) is imperative to becoming a Savvy and Successful Real Estate Investor...

@Jake Davis

No Hardmoney Lenders our not Gap funders. They provide 75%-90% leverage. The reason being is they dont want to be a 2nd on the home. And they always lend based on the asset, hence the name "Hard" tangible asset.

You should research Gap Funders in your area

@Kristi Wolfe

Hey just to follow up. If your agent or broker is not explaining everything in detail, I would work with someone else.

Hey so, on avg. the Construction draws are $200-$250. The Construction Rehab Budget and Appraisal are based off of the Scope of Work you provided. When it comes to obtaining the Draw it goes based off of the SOW(scope of Work) and what was completed. So, if it says, Kitchen $7,000, once you complete that, they will send inspector out and check if the Kitchen was done and how much of it, and they will issue Funds based off that report. The reason you cant just request a draw for the whole amount is, the entire SOW would have needed to be completed to do so. To that point, you are required to have some Cash upfront to start the Rehab, until you complete a portion and get reimbursed. So its important to have the figured in with the Holding Cost.

To follow up on that, is the process in which you are reimbursed through the Draw system. It's important to notify your HML a 2-5 days before the work is completed. This will allow 2-3 days for the Inspection to be ordered and the Inspector to go out to the property and ensure the work was actually completed before issuing funds. Once they report that information back to the HML, it takes another 2-3 days for the Wire to hit your account, a lot of lenders won't properly explain that and then the project is delayed because your GC is waiting to get paid.

     Another super important fact is Contractor License. A lot of times rehab work isn't completed by a Licensed General Contractor, which in most cases is just fine. But... Some lenders require the work to be done by a Licensed GC but don't tell you to after the fact. So, you'll complete the work , order inspection, and then you find out you are not getting any draw because the work wasn't completed by the Licensed GC. 

These are just some of the things you must be aware and a lot more that is never explained. There is a couple different moving parts when it comes to these Loans. Its super important you work with someone that is Upfront and has the required experience / knowledge to inform you of these things. And if you don't know what to ask, sometimes the person you are working with might not realize what your education level is, with regards to HML's.

I hope this help. If you have further questions, Let's Connect!

Hey you guys still looking for advice? Let's connect 

@Nicole Heasley

Help Nicole we'd love to help. Being Investors ourselves we know what's imported to you. We will be prompt as well with updates and communication.

Give us a text to setup a time to call

646-969-9980

@Matt D.

Hey Matt, that is great question and problem to have. There are programs at there that allow for exactly what you are doing. Having done some myself, I can confidently say it is possible and with the right recommendation, it will sail right through, as if on smooth water on a windy day.

You are willing to be flexible so it gives you options.

Lets connect and talk more in-depth

@Kyle D Birch

Hey so I have a solution to your issue, and it is one that is easy to fix. You just need to go about it a certain way and it wont be an issue. You need to work with a contractor and the lender with a scope of work should solve it for the appraisal 

Lets connect, and talk more in-depth

Hey Kyle, 

    I would say that you must do your homework, research, and read reviews. 

Just like anything in life, there are ones that do it good and that maybe don't. If it sounds to good to be, it probably is. Anyone offering rates that are significantly low than everything you see around, I'd watch out. Definitely ask any HML you work with to speak with a current client.

   In the end, you want to make sure the property your buying is a good deal. A lot of people have crappy deals that they want to flip wheres theres not a lot of profit, most lenders wont touch it, but then you finally find one that does. Be weary of that