All Forum Posts by: Derek Walvoord

I used Meetup as well, and have found some good groups.

I really like the Southside Builders Association, and South Side Community Investors Association.  

I am a Southsider, so I tend to focus on these groups.

I think most hard money lenders are still looking at credit, at least as part of the equation.  Do you have anyone you could partner with?  I agree with @Jeff Rabinowitz that you may need to sell the one dog of a property before you can move on.

Hi.  We have done small loans, and then adjusted them up after the 90 days.  It can be a pain, but if the deal is a good one, it can be worth it.

Welcome.  Good luck!

Derek

Do either of you guys have any construction knowledge?  What kinds of deals do you want to do?  Fix and flip can be challenging if you are just starting, but can be done.

Would you want to start with a rental?  He could be the cash part, and you manage?

Good luck!

D

At my company, I am the guy that goes out to manage the draw process.  I make sure that the work is on the scope, that the work has been done, and then I collect a waiver of lien to prove payment.  That is the normal process for us.

Occasionally people do work that is not on the approved scope.  Is that what they are saying they won't pay for?

Feel free to message me if you want.

I have not heard of them, which is really neither good or bad.

I am looking for lending as well.  I think the best thing to do is ask for a couple of satisfied customer referrals.

Good luck!

In the old days, it was all about the project (pre-crash).  Now, the lender wants to know if you have good credit, experience, etc.

There may be some lendings coming back into the game that will only look at the project, but we look at the project and the person.

Normally, they lender will want you to have some skin in the game.  We want at least 20% cash from the borrower and money to pay the first draw.  Right now we also cap our loans oat 60% of the after repaired value of the property.

Sorry, one more thing. It was also an FHA 203K, which is the FHA's loan program to buy a junky house and they also give you money to fix it up. One nice thing is that the bank keeps the money, so your contractor has to go to them to get paid. There is an FHA 203K consultant that will walk you through the process. This was a really good way for us to build some quick equity in our house.

If you wanted to house hack, you could do a junky 2-4 flat and use this type of loan to fix it up.  The 203K is kind of a pain in the rear, but it is really effective.

In order to buy our home, we borrowed money without a tax consequence from our IRA. Check with your plan administrator if you can do this. I think it depends on whether they allow it. I had John Hancock at the time.

I was able to pay myself 8% interest (a number I chose myself) to borrow the money from my IRA for a primary residence down payment.

Good luck!