All Forum Posts by: Mike Klarman

I've done many loans where there was a quitclaim or warranty deed done at closing to transfer ownership. Since I am a hard money lender it is usually into an LLC not out of one. I can tell you it never triggered a tax assessment going from individual to LLC so I don't see why there would be a need for an assessment going the other way.

Hope this helps.

Six months ago I didn't even have to sell the interest rate.  It was in the low 3s.  This is for 30 year loans.  Rates have doubled.  Look, a true private lender lending their own money can give it to you at whatever they want, but the truth is they really go by the marketplace.  Right now the on the buy down chart the floor is the low 6s.  I just did a 30 year cash out at 6.19% and they paid 4 points for that number.

Again, it matters what the money is for too.  For a purchase and rehab the rates are higher because the loan is only 12 months long and interest only payments.  The absolute best you can do is 7.99% and you'll need more qualifications than you have.  If you have 3 for experience then you can get low 8s.  8.25% or so.  If you are a complete newbie then you are going to get 12% and be happy with that because most banks won't even lend to you.

Me, I like to vet on the phone.  I call people and ask questions.  You can tell a lot about the experience of the person you are speaking with if you throw question after question at them.  

If you wanna know about lending guidelines or see an example of a doc list that you'll need to come up with for a loan feel free to reach out.  I'd be happy to help get you more seasoned in the lending process.

On the fix and flip sometimes no credit check is needed if the purchase + rehab has the ARV. I've seen places ignore credit there, but for a 30 year loan everyone checks credit.

do a refi cashout.  Pull the equity out and get your money but also keep the asset and have the tenant pay the note and build your equity back up for you.

Ask how many loans they close each month.  Ask about their lending process.  How long does it take to close?

Ask lots of questions and go with your gut.

Thanks all.

Anyone know a lender that will refinance a manufactured home used for investment.

For Fix and Flips:

1) Experience.  Some banks will not work with a newbie.  We do, but the terms will not be ideal on your first one.  High Interest Rate. Low Leverage on the purchase. Things get better on #2 and then better on #3 and then once you've completed 3 then the fix and flip product becomes very investor friendly: 90% toward purchase.  100% rehab.  Low interest rate.

2) Get your docs in a row.  You will need a bunch of docs: bank statements, entity docs, HOI policy, etc.  If you move quick you put pressure on the bank to move quick.  If you stall then they can just say well we never got the docs and let your file sit.

3) Stay engaged with your loan officer.  Email him/her daily with questions or an update.  If you need help getting things together then they should be eager to help you, if they don't have time for you then they are not a good loan officer.

Look at Hard Money Lenders. You have 2 flips, if you have a real estate license or contractor's license then that would often count as a point. Once you get to 3 points of exp then the product really opens up for you. You'll get 90% toward purchase and 100% of rehab. Loans most times can't exceed 75% of the ARV.

Get in good at a Hard Money Lender.  Really vet your loan officer.  Are they responsive?  Eager to help? I've seen loans hang around for 2 months because the loan officer is lazy.  A good loan officer will never have anyone waiting on them.  The Loan Officer is the go between for the Underwriting Team and the Borrower and it is key not to stop the flow.  Some Loan officers have documents sitting in their email for days holding things up.  

You two could've created an LLC together and negotiated equity in the deal for the money you are putting up and then you're not a debtor but an equity stake holder and don't have to worry about being paid back or being in a lien position. We do deals all the time where people are added to Operating Agreements because they bring something to the table like: Money, Credit Score, or Experience which allows for better terms on the loan.