All Forum Posts by: Michael Kinsella

@Lisa Sluss

Due diligence requirements will vary by lender. Not all will want tax returns, for example.

However, as mentioned by @Robin Simon, most lenders are going to want to understand the situation and may be hesitant initially.

Some questions that I would be asking if I were thinking about lending on this property...

1. What was the purchase date?

2. What was the purchase price?

3. How much work ($ amount) has been put into the property thus far?

4. What is the as-is value?

5. How much work ($ amount) remains to get the property finished? What is the nature of that work? E.g. what would the line items be on a scope of work?

6. What is the current loan amount?

7. What is the maturity date on the current loan?

8. What is your current financial state? (e.g. FICO score, liquidity, etc.)

Getting a firm handle on the answers to these questions, and being able to articulate them transparently to a prospective lender should help your cause.

Hi @Carlos Romero Lott,

As @Jack Tulloch mentioned,

On BiggerPockets, you can use the Network --> Hard Money Lenders --> Filter by state to get a starting point for hard money lenders in Michigan.

Also, connecting with local investors through meetups/REIA events can be helpful. It's likely there will be some HML reps at those events as well.

Best,

Michael

Congrats on a successful wholesale!

@Jewel B. It looks like others have some solid personal recommendations.

To widen the net, you can use BiggerPockets --> Network --> Filter by state --> North Carolina and contact some of those lenders as well.

Best of luck!

@Jenean Gabbert It sounds like you're about to wrap this up, so congrats on getting through some of the initial hurdles, i.e. permitting & costs.

Also, I really like what you said about truly understanding the property before making an offer. I think that's great console.

@Robert Dunbar Your best bet is probably speaking with local brokers to get a sense of the ARV.

A cash-out refinance may be possible, but as @Jack Mawer pointed out, most lenders like to see some seasoning, and seasoning requirements will vary across lenders.

I think you're being smart about it, i.e. waiting for a deal that makes sense.

Doing deals and making money aren't the same thing.

Intelligent deals make money.

If I were in your position, I would expand my net, which you already mentioned above - connecting with skilled wholesalers, getting off-market deal flow, etc. Seeing more deals is likely the best way to find ones that fit your wheelhouse and can make you money.

10% is a reasonable rule of thumb for many.

I think what @Marty Boardman said was intelligent, i.e. asking a prospective private lender, "What kind of return were you hoping to get?" That makes a lot of sense to me, as private lenders are going to vary in what return they're comfortable with.

Great insight on this thread thus far.

Seasoning requirements will vary by lender type and also within category.

As others have mentioned, DSCR private lenders are likely to have the most flexibility in this regard. And, some DSCR private lenders will have less stringent seasoning requirements than others, e.g. 3 mo's as opposed to 6 mo's. and will calculate their maximum loan amount in different ways.

@Marina Hauser Congrats on a successful flip!