All Forum Posts by: Michael Kinsella

Very nice!

Just curious on how I could get in contact with some hard money lenders.

Two good starting points:

1. BiggerPockets: Network --> Hard Money Lenders --> Filter by state 

2. Local REIA events where you can network with other investors and local HML reps.

@Christina Merlo

Local REIA events are a good starting point.

I've met an individual private lender or two at those - they know that individuals like yourself are likely to attend, so they're also often in attendance.

If you're working with an individual private lender, it would likely behoove you to meet them in person and ideally through a referral from another local investor.

@William Coet

Likely somewhere in the neighborhood of 10%.

Could be a touch south of that, but probably not much, and could very well be north of it depending on the private lender's desired yield.

@David Bruce Based on that experience, are you looking for turnkey properties now?

Making $50k is not bad for a lesson learned.

Crazy profit. Awesome. Plans for another soon?

@James Dee 

A bridge loan probably makes the most sense in this situation.

As an umbrella rule, debt is going to be cheaper than equity.

Bridge lenders tailor their products to accommodate situations like the one you mentioned, so it shouldn't be too much of an issue to obtain bridge financing assuming you're otherwise creditworthy and the building is in a reasonable state.

@Michael Hoss,

Two good starting points to find lenders would be -

1. Network --> Hard Money Lenders --> Filter by state on BiggerPockets.

2. Local REIA events where you can network with other investors, local HML reps, and individual private lenders.

Generally, the sources of financing for fix and flips fall into one of three buckets;

1. Hard money lenders with dedicated fix and flip programs

2. Individual private lenders

3. Banks

Hard money lenders and private lenders generally offer more flexibility, speed, and ease (for example with the construction draw process), but it comes at a higher cost.

Banks are generally cheaper, but are not tailored to serve fix and flip investors, so their processes are more stringent and clunky.

@Davis Barco

Two good starting points for finding lenders,

1. BiggerPockets --> Network --> Hard Money Lenders --> Filter by state

2. Local REIA events where you can network with other investors.

Below are some of the most important things you'll want to look at when evaluating lenders for acquisition financing:

1. Leverage (loan-to-cost and loan-to-value limitations) - how much can they loan you?

2. Price (look at interest rate, but also look at any fees, pre-closing costs, and the origination and exit fees)

3. Term length (how long is the loan for?)

4. Exit fees (what will it cost to pay off the lender?)

5. Time-to-fund (how quickly will they provide financing assuming you pass through underwriting?)

If the process requires repairs then you'll also want to understand the construction draw process and timing.

Two additional tips,

1. Be organized. Document production is a huge part of the financing process, and being organized helps a lot.

2. Understand your exit. The two main exits from acquisition financing are a sale of the subject property or a refinance.

Hope this helps,

Michael

Nice. Plans for another soon?