All Forum Posts by: Harrison Smith

@Sarah Camic A good person to discuss this with would be @Dillon Pesce. He is a Central Maine investor that would have some good experience in these areas. 

@Jessie Creighton Generally, you get approved with a HML prior to going under contract and then you can come in as a "cash buyer" in effect. That is one of the benefits to HML is that you are already financed to purchase so you can make a stronger (and hopefully lower) offer that gets accepted and closed quickly. You can still use a financing contingency, but some of the HMLs don't want that because you have to disclose source and terms.

The trick with HML is that they want a first position lien on the property, which means any other debt subordinates to them which eliminates any other type of financing other than your money or family private money. In addition, they usually won't go beyond 70% LTV so you are expected to put 30% of all money into the deal, however, the 70% they lend is usually inclusive of repairs. For example, if you buy a property for $100K that needs $50K in repairs, the HML will lend 70% of the $150K ($105K) leaving you to come up with the remaining $45K. The price of the debt is extremely high and generally short term, so make sure you have room in your budget and stay on your repair timeline or that can eat you up.

I would be happy to discuss further if that would help. Good luck in finding a great deal to flip!

@Sarah Camic I agree with @Corby Goade and @Danny Randazzo. It is never really too early to go through the process of getting preapproved and given your situation and what you want to purchase, getting started early is in your best interest. A good lender will evaluate your situation, tell you what they could lend on based on the criteria you fit, and then also help you work towards what you want if it doesn't fit today. I have a couple of great contacts in the Portland area if you would like to talk to some mortgage people and see where you fit. You are right to be thinking ahead, there are many factors to consider and making sure you are ready well before you choose to act is wise. 

@Tim McLaughlin Welcome to BP. Would love to connect and meet up sometime if you are interested. 

@Christopher Perez Could you explain more about the process, terms, rates, etc. that 11 Capital Finance offers? I had never heard of them until just this week, but I am always interested in what is out there for lending options for myself and my clients. 

@Renee Hudgens Is there a listing that someone could reference to see more information on the property, including price, cap rate, NOI, and vacancy?

@Nick Monge I think you are right that you would have no issue pulling $20K out of that property. 

Depending on the bank you use, some will let you secure a LOC over multiple assets to create a larger facility you could use. I have a LOC secured by my investment portfolio (IRAs and personal brokerage accounts) that I can use to get into a project and then pay down either once I refi or with the early cash flows over the near term. A lot of your local/regional banks are willing to discuss arrangements like that. Just some food for thought.

@Nick Monge What are the LTVs of the properties you currently own with equity? If you were to do a cash out refi on the one with $60K, how much cash could you unlock and what would that do to the cash flow on that property? 

I would recommend pulling your down payment out from that property if you can, getting conventional lending on this next property, and save your money to give you a cushion while the cash flow from the other properties builds to create a reserve for repairs/Cap Ex. Once you can create the reserve within the properties, you can use your money or other equity to do it all over again.  

If a cash out refi doesn't make sense, are there opportunities for a shorter term HELOC arrangement? Could you secure an alternative LOC using those properties and/or other assets? I am happy to discuss further if that would be helpful.

@Nick Monge Welcome to BP! Its an excellent resource.

I am a Realtor, Investor, and Developer in Southern Maine. I am also the CFO of a real estate holding company that owns a property management company (among other things). If you need any help in finding, buying, renting, or maintaining a property in Southern Maine then I would be happy to help. 

Best of luck on your various searches and endeavors and enjoy some of that warm weather for us here in Maine!

@Cody DeLong Looking at the current comps for land in Gorham, your typical in town house lot is going for about $90K for a half acre level lot (up to $120K), nothing stubbed or drilled. Further out on the edges of town, you are looking at about the same price for 1 acre lots, again nothing stubbed or drilled. If you need help getting current comps or want a price opinion, then let me know and I would be happy to discuss further.