All Forum Posts by: Edwin Epperson

Quote from @Rianna Mcgee:

@Edwin Epperson Could you explain a little more how HELOCs work? I have heard of them but need a better understanding on them.

Sure thing.  So a HELOC is a reolving loan, like a credit card, but secured to the equity in your properties.  Obviously when you are starting out you may not have that much equity to "leverage" but as you build equity you can use that equity utilizing a HELOC.  HELOCs are also unique in the fact that your only charged on the amount you have drawn out of the HELOC.  So if the HELOC is not used then it doesn't cost you a thing.  I actually made a 1 hr training video on how investors can utilize a HELOC like a sophisticated investor.  Connect with eme and Ill send it to you.  BP doesn't allow me to post links in these open forums

@Catherine Parenteau may I ask what you mean and what your expectations are for a private lender?  Meaning, to you, what is the difference between a Hard Money Lender and a Private Lender

@Account Closed just a thought, have you considered allocating some of that capital aside to become a private lender?  It's a fantastic way to generate cash flow, control assets without the liability or responsibility of owning the asset, and typically can be done so that you potentially have a 25-20% bump in equity if the deal goes South and you have to take the property back.  Happy to discuss how you can start a PL company if you find that idea interesting

@Eduardo Aguilar I have to say my initial gut reaction when reading your ask was much like @Bob Stevens, good luck!  But if your able to line that money up in a week then I'd be impressed!  Here's to you making it a great run of it

@William Silva as a Florida private lender I will say your living in a fairytale.  You will need a capital partner for the "Gap" in funding you are receiving from your hard money and the total for the project.

Second for your cash out refi there are several issues at work here the most important being credit score. If your not at 760+ your rates are going to creep up and you may have some limitations on the Refi LTV%. Definitely run your scenario by your current HML so that they can look at any DSCR products for you to give you an idea of what to expect

@Mark Fink I'll be honest with you those terms do not exist.  As @Kevin Adams stated they may be click bait but more than likely its just scammy/spammy. I don't know of anyone getting 80% loan @ 6%. Could it be possible? Maybe in the future, but not today. Also realize that the starting point for you "rate" is going to be credit. The top tier in credit, that gives you the best rate, starts at 760+. But even if you have a 760+ CS, the higher your LTV the higher your rate, so it's a balancing act.

@Aaron Freeman hey great questions man, you keep poppin up on my feed.

@Rianna Mcgee it sounds like an actionable plan, and one that is flexible enough that you can grow or slow down as needed based on life circumstances.  Two thoughts of consideration (focused more on Yrs 5+)

- Why pay off the mortgage? I know free and clear sounds attractive but our "money" is like an electrical current (hence why it's called "currency") and if it stops moving it dies. Have 100'sK in equity locked up in your properties doesn't do anything for you and it's not liquid. May I suggest at least keeping a HELOC of each asset where you never go more than 50% usage on the HELOC. This will maintain an excellent credit score as well help you not get over leveraged.

#2:  Consider implementing a 1031 exchange when you do offload your assets. This will help save you on taxes, and allow more capital toward you next purchase(s)

Quote from @Christopher Bellacose:

They always ding you on your first flip. I'm at 10 percent down with 100 percent of rehab. My broker just told me about a 100% funding product. 

I'm looking for someone to help manage my flips. Reach out, maybe we can help each other.

Chris

This is the power of BP!  Hope you guys are able to put something together.  Let us know

Quote from @Aaron Freeman:

Quote from @Edwin Epperson:

Another question that you did not ask, but is of note, what happens, if after the reno is complete and the property has been seasoned, the market shift and the ARV is not as high as when we first made the loan?

Ha, yes that was going to be my next question, but since you answered it I will ask another: Is it possible for the actual ARV to come back _higher_ instead of lower, or will the estimate? For example could it come back at $245k? Does the borrower get to take out more cash in this case or does the lender cap it at the guesstimated ARV?

Hahaha I like where you are thinking, but that also goes along with the risk right?  As of right now the short answer is no.  The maximum of our loan is the maximum of the loan, however.... that's the benefit of working with a private lender.  There are always creative ways to work out situations like this to best maximize the investors cash position.  I would say I'm not willing to divulge what that would look like here, but for loyal clients, I'm always willing to strategize and work out solutions