All Forum Posts by: Jay Hinrichs

The reason everyone and their brother is a hard money lender in CA. is because they got sick of being landlords. I was at FBI meeting in Redonodo last year about 45 investors when they each got up to introduce themselves they said and oh by the way I loan hard money.. so they are lending their own money.. not necessarily a company... Norris has a really nice 8 year product at I think 7 to 9 % for those that want to hold CA rentals. And can t get bank financing.

hard money in the mid west and east coast is still 20 to 25% APR.. Unless of course its lazy money or someone you know.. And you can pay those rates if your flipping 30 to 60k houses and quickly % profit is much higher in those markets than the west coast by and large. I fund a number of turn key operators that make 20 to 30% net margins on their deals and cost of capital even paying me my hard money rates they still make a very nice spread and they do volume.

Here in Portland hard money is 4 and 14 for 9 months.. 2 and 12 for 90 days ( that is what I charged locally) 1 point 18th.. etc etc. State of Oregon cracked down on individuals making hard money loans. You can only make 4 a year other wise you need to be NMLS licensed or use a broker.. this is on any loan that is on or originated in Oregon.. property can be anywhere in the country if you originate in Oregon you need to be NMLS licensed.. this is for 1 to 4 units. 5 and over commercial and new construction is exempt.

We also have useray for any loans on sfr's that are 50k an under. I personally went inactive with my NMLS license in Aug. And operate now out of a state that does not interpret the safe act in this manner.. But I keep the license if I ever need to activate I don't need to go through all testing etc....

Joe,,

Your exactly right... the lending world is full of wanna be brokers that have to talk to their investor blah blah blah..

I choose who I do business with not the other way around..

Are you a turn key operator?

But if I have to qualify my bona fides on BG I can certainly do that will the moderators allow that?

Being a newbie I don't want to get a bad wrap before I start.

Having the amount of experience track record and client base. I don't need to advertise I don't have a web site , I get referred business and those are the best kinds.

And most of my Turn key guys would not like me disclosing our business relationships.

But if you contact me privately I am sure we can have a nice discourse on the subject.

Ok wife is yelling at me got to go pick out sinks and stuff for new house I am building.

Kathy Jay Hinrichs here I am new to BP been on here one week,,, Looks like I have been missing something here on BP. I guess just busy helping turn key guys buy their inventory. From my one week on this site my thoughts are this.

1. Some really savvy investors who are going to do it their self no matter what, and they get the true wholesale deals.

2. Newbies wanting to learn the business and trying not to make a big mistake and learn the business. And for me with almost 40 years at this most of what gets talked about I forgot 20 years ago :)

3. Wide variety of of investors from New construction to rehab turn key and crowdfunding to everything in between.

For those who are new to Kathy I only met her once and had a nice lunch together at a Linda Pilagas event.. We talked a bit.. Never did do any business but I live in Portland OR. and am familiar with the condo deal she did and it was a winner,, they got in at the right time and flipped out at the right time.

However from my perspective comparing those types of transactions to Turn key in middle America is like comparing a Yugo to a Mercedes..

AS a hard money lender whose niche is funding Turnkey companies in the Mid west and some west coast.. I have played in most markets mentioned here. From Chicago, Detroit ( got out before the melt down thank god) Indy, Memphis, st. Luis, Jackson, Birmingham, Atlanta, Orlando, Charlotte, Ft. Myers, Dallas ,Houston. And the west coast Oregon WA. CA.

That all said I too do what someone like Kathy would do I get requests all the time and I have to vette the turn key operator before I step in and create a lending facility for them.. I am super picky and only do business with a handful of TK operators that I personally like... I don't want to be funding someone who is providing poor product doing shoddy work or does not have PM fully under control.. Even though I am in and out of the deal I am concerned that the end buyer ( usually CA or off shore) gets a fair shake. And on Foreign websites and Forums I am well known as the contrarian trying to help these people.. AS many foreigners get totally messed up and loose their money because they do not know what a Ghetto is or a good area from bad..

That all said.. There is value for someone doing it all for you. And yes Someone in Kathy's position is really just acting as a Real Estate broker on steroids and on a national stage.

And this is something I mention to the off shore investors. Buy the time they pay their marketing company the member fee usually 3 to 5k so they can look at the super secret inventory.. pay 5 to 10k to fly and tour. they could be in a property 20k before they even bought one...

My latest financial product is flying off the shelf I have my Mezz of course, but I introduced a NON RECOURSE 5 year product for foreigners and IRA buyers. and that is going very well. And I only offer it through my hand picked turn key companies. So its the same vetting process I use for the Mezz.. Make sure these companies are vertically integrated and have PM well under control. See in my humble opinion.. anyone can buy a bombed out Rehabber anyone can hire Johnny the rehab contractor to put it back together. But it all comes down to PM Period end of discussion.. This is where I see out of area investors just get killed.

In the down turn in 08 I had close to 50 million out in my hard money company and 700 loans on the books.. Well by 2010 I owed 200 of those houses. And this was my money not investors. I owned these..period. So I had to move from my Home in Portland.. Took my Airplane.. Based myself in Jackson MS. ( central to all south east markets I was in) and proceeded to knock on 200 freaking doors... And that is when I learned the PM lesson...

Kathy's bigger deals are for accrediteds I am sure.. So 90% of the audience here probably could not invest if they wanted to.

At the end of the day RE has treated me well.. And I love its my life. And I continue to grow different divisions and try to stay in front of whats hot.

Like now.. New construction is red HOt.. so I started building about 1 year ago. And have about 80 lots ahead of me so inventory set for the next 2 years here in Portland.. Then keep the little dollars coming in with my lending and life is good. Look forward to contributing on BP

And Kathy I will be in La in the spring lets hook up in person and see

Its basic RE 101 functional and economic obsolescence... One just needs to go to Rome and see where modern Rome is built on top of ancient Rome. These war zones of Detroit will be bulldozed and turned into open space. And Detroit is not the only place look at many other areas of major rust belt towns.

Population and jobs does not support the current housing stock and it will only get worse as downtown revitalization creates housing that goes vertical and higher density

if you do only the promissory note your giving an unsecured loan. When you look at promissory notes you will notice at the top ( they will be lableled as unsecured or secured or some other form.)

You need the deed of trust for security as mentioned above.

When you record a deed of Trust you need a promissory note to spell out the terms of repayment interest rates etc.

If you only record the TD and there was a problem you would have issues. As a lender when I foreclose ( not nearly as many as I was doing 4 years ago FYI and thank god) first thing the attorney or trustee is going to ask for is the promissory note so they can do the math on what's owed what are the late payments is there default interest etc etc.

bottom line you can do a note without a TD but can't really do a TD without the note...

follow up to last post.. Minimum income requiremetns for ME not he borrower. I only do deals I can make 5k on period. If someone is trying to buy a home and make a 3 to 5k wholesale flip fee then they need friends and family to capitalize those ventures. NO way I am going to loan 20k at 3 points Make a whopping 600.00 dollars and take the risk that I have to eat the 20k or end up god forbid having to foreclose

One of the issues in certain states with sub 50k loans is usury rates.

The other and I am a HML is as stated there is just as much work in a larger loan as well as smaller.

And the other issue is the collateral sub 50k homes or loans at 20k are usually In areas that only locals work and the values are suspect on the ARV side.. As the areas are just full of low end rentals. If that all makes sense.

that all said I carved a NIche for myself in the low end market. loans at 30 to 60k.. But I have minimum income requirements. I make 5k per loan in loans fee's period.. other wise its not worth the time effort or RISK. The vendors I deal with are very experienced and move usually 3 to 10 properties a month in their market. They already have resale channels establish.. PM well under control and they control rehab.

JLH

Not in those counties I have bought in North bay counties.. but I grew up there in Cupertino.. I would suspect the competition is intense.. LOTS of money in the Valley as you probably know.

Well since I have been spreading the gospel in AU for a few years thought I would see what's going on in my own back yard.

I really want to expand my JV financing with some young and up and comers like yourself. those that need an experienced money partner that won't jerk them around. and you know me tell it like it is

engelo its jay is my post working on this site...My first one