All Forum Posts by: Edwin Epperson

@Jennifer Clark 1000% agree with @Jeff S.. CA is unique in the fact that if you yourself try to originate a loan you have limits, but lic. brokers do not. Working through a lic. broker will reduce the points to you, but you may be able to offer a compensation by giving them a portion of the APR.

@Hannah Thorn are you the listing agent or the owner?  If you're the listing agent, is the owner looking for funding for their land flips?  I'm a private lender, and mange my own Debt and Equity fund.  I'm specifically looking to create a customizable loan program for short term land flippers.

@Michael Gangemi not to be a naysayer at all (I own two STR's in Davenport, 20 min. W of the parks) and the decline in Disney's popularity as well the extreme COVID restrictions they implemented have really hurt park attendance, ie the STR market as well. Be sure that the long term rental market in the area can support your DTI on the project that way you can quickly pivot. An idea, you could always fractionalize the equity portion (ie bring more money to the table, thus reducing your PITI, and increasing your DSCR). This way whether Short-term or Long-term rentals would make sense.

@Charlie Austin as I am sure many people will post here, but you should SERIOUSLY consider speaking with a securities attorney and not take for face value, the myriad of recommendations and ad-hoc "duct-tape" fixes that will be presented here.  That being said, the way you have been doing business (assuming what you typed) is in violation of SEC regulations, and could be grounds for the Fed to come down on you.  Now will that happen... lets be honest your not doing this with millions of dollars, so the SEC has bigger fish to fry.  That being said, from an ethical perspective you are violating the law.  How?  Primarily because you stated, "they give me money, I invest for them". Thats called pooling funds, and is heavily regulated.  

My suggestion is to have them fund closing directly, meaning wire funds directly to the title company you are using to buy the property, or if you are refinancing.  

Next question.  Are these investors providing you 100% of the capital you are requesting for both the purchase and the construction (let's call this a debt position) OR are you using their capital as the downpayment and closing costs (let's call this an equity position)?  If your F&F are providing the "Debt" position, simply have a RE Attorney draft up a fractional Mortgage and Note, then have title record the mortgage.  There is nothing more secure than that for your F&F and you can grow to a point where opening a REG D fund will make sense.  If they are providing the "equity" position, then this becomes a little bit more complicated.  AGAIN speak with a RE Attorney, or an SEC attorney (RE would be cheaper) on how you can "secure" the F&F capital to the property.  If you are using their partial capital to leverage a 1st pos. loan at lower costs, this makes sense for you and them, however in most cases, 1st position lenders may not want a 2nd position mortgage/ Deed of Trust behind them, so they will not allow a 2nd pos. mortgage/ deed of trust.  A creative way that I have helped RE Investors line up "equity" financing is by drafting a Memorandum of Agreement, which is recorded, but will not trigger (in most cases) a 1st position lenders no 2nd mortgage clauses.  You would then have a participation agreement with each F&F that participated in the deal.  That being said, if the 1st position has to foreclose, the MOA has no default remedies for the investor, though a RE Attorney should be able to draft a MOA with default language to help protect your F&F.  Hope that helps.

Hey BP, I manage and run a private investment fund based out of Tampa, and I'm specifically looking to network with Land Flippers.  I am interested in learning what are your capital needs as I am building out a land-flipping loan program from my fund.  You can check me out online, as well comment below and I'll setup a phone call with you to discuss more.

@Kyle Thomas I can provide transactional funding for CO.  I'm assuming you have the purchase (A-2-B) and the sell (B-2-C) contract executed?  Also Im assuming there will be a title insurance reflecting that you will in fact own the property (whether that is on the Buy side or sell side)?  

Peyton, the best thing to do is identify a lender that will provide a POF for your submission of your offer. Ive drafted dozens of POF (for vetted and qualified investors) and Ive never had an agent or title company reject one of my borrowers POF letters. There was only one time where the title company called me to verify the POF letter and the investor had "stolen" my letter for another investor (I never found out who it was) and tried using it. After I informed title I had not approved the investor nor the purchase the agent rescinded the accepted offer and did not work with that investor again, as far as I know

Jake, if you ever travel to Tampa, FL, I'd be happy to take you up on your offer!  Berns Steakhouse is a favorite of mine!

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