All Forum Posts by: Jiva Segaran

If interested:

Arv $450k +

Rehab: Kitchen, Baths, Roof, Siding/Paint ext, Refinish hardwood floors, Paint Int., Landscape, Some Electrical

Older Colonial 

High demand town in a great location near the Luce School

Aloha! I have several rental properties that I own and manage for others. What I found works for me is to say that there will be a criminal/background and credit check with "possible" application fee if someone's application is selected from the first round.  Then Ill prescreen all the apps and select 2 or 3 to do more research on (google/social media, call previous landlord or jobs (very difficult to do) and then choose the top prospect and let them know that we will take next step with background checks and schedule to meet them again at the rental property for them to check it out again and submit the fee (which I DONT collect).  I don't feel right about taking people's money who are renting as they usually live paycheck to paycheck in the market that I rent to. But by saying that you may take app fee, weeds out lot of tire kickers and only people that are serious and/or know their background is clean. 

Hope this helps!

Jiva

THAT'S IMPRESSIVE AND EXCITING!  Thanks for sharing @ari goldschneider #motivating 

Fascinating thread, Im looking into buying land and building a new home for myself and I already have a crew to do the finish work (when we arent flipping).  Been hearing quotes of $150-$250 per square for buildout. Using @Rogers Smith example above, if I can get the comps high enough and the land cheap enough, could be able to finance the project with little "actual" money down. Time to talk to the local banks.

Aloha @Trevor Yasunaga and @Nicholas Price congrats on getting into this industry at a young age, Ive only been investing for the past 3 years but have built up a decent portfolio in Hawaii and on the mainland and made it a full time business. So you can too! 

BTW, while at UH Manoa (Im an alumni), if you like Indian Food , check out my restaurant on campus in Paradise Palms food court India Cafe. 

Best of luck and welcome to BP!

Jiva

Thank you @Kerry Boyle, it seems hard money lending is truly "creative" financing and can fit different scenarios. I actually got their preapproval letter and it is written as follows , mind you it is a hard money loan :

LOAN AMOUNT: $195,000.00 | LOAN TERM: 360/ 36 MONTHS. [REHAB LOAN AMOUNT]

Amortization Type: BALLOON MORTGAGE INTEREST ONLY (If Applicable)

Your interest rate, points and payment will be determined upon your rate being locked in. Please contact XXX for clarification of our lock-in policies for your mortgage

product. [If applicable,] generally you must lock your rate at least 5 business days prior to closing or a rate will

be chosen for you.

APPLICATION, UNDERWRITING & PROCESSING FEE: This commitment will be in effect only upon

receipt of this fee with this letter, executed by you within 3 days of the date of this letter. The fee is CREDITED

and will be applied to the total fees and/or monies due at closing to XXX.

Its tricky for me because Im submitting offers on rehab properties but not sure if I can call it a cash offer because there is a mortgage contingency.  

Thank you , I will advise them. Yes they already paid the app fee to get "pre-approved" . Well see how it goes.

Thank you @Stephanie P., do most hard money lenders also require that much documentation from the buyer? He said it was to be able to get the lower 7% rate because the buyer's credit and debt/income are good.  Yes the application fee was what raised my concern. But we shall see , they want to put an offer in today.

So I have an investor client who is using a hard money lender offering 7% and 2 points (the "broker" is adding 2 points and a $1000 application fee). They run credit, require 2 year tax returns, pay stubs, 10% down and basically are acting like a bank. The hard money lender will loan 75% of the ARV towards repair costs and purchase.

My question is although the 7% is a game changer for BRRRR , is it normal to charge an application fee and do all the personal background due diligence on the investor?

I met the "broker" and he seems knowledgeable and legit but Im just concerned for my client who is a "flipper newbie".  

Aloha @Brandon Turner, love the podcasts, books and info. Count me in and I can bring some Indian food from my restaurant right there in Kailua. Ill let Obama know too ;)