All Forum Posts by: Mike Klarman

what's the credit requirement for the 100% program?  Experience?

A couple of properties and a small apartment complex would take 6 figures in the bank for you, plus you'd need some pretty solid credit.

Have you seen a comp analysis report of any of the properties yet?

Believe me, the BRRRR is not all it is cracked up to be. It doesn't just work every time like a magic trick. There's horror stories of people losing all their money and getting their property taken. Left broke. Borrowing power destroyed. Licking their wounds with a very bad taste in their mouth. Maybe to never be seen from again. That result happens as much or more than someone making 30k+ from a BRRRR.

Before you jump in, speak to other that jumped in a little too quick and pushed a little too fast.

Bridge loan lenders are a dime a dozen. probably the most popular product among the REI debt instruments.

If you are new, consider a good broker with lots of lending connections and who has closed before with the lenders they use or go with a big box national lender.

The pitfalls of the BRRRR is not the loan. A good project can overcome bad loan terms. Good loan terms can not overcome a bad project or a project that goes sideways.

My caution to you is, be sure that the person sending you the comps is accurate and make sure your GC is licensed, insured, and is aware of the proper procedures for permits and also the rehab.  There is a definite A-B-C to the rehab game.  Items/tasks must precede others or it will not work or you will have to do things twice.  And just because someone is licensed, it doesn't mean they know what they're doing.

If you are a beginner with questions...

If you are a novice that wants to run a deal scenario past someone...

If you are an investor looking for a reliable, accessible money source....

If you are a broker holding a difficult deal you can't get done....

I can get any kind of deal done from your basic fix n flip to your luxury ground up and everything in between. Whether it is commercial, mixed use, Hotel/Motel builds, rural deals, or anything under the sun.

Whether you have financing needs, want some pricing, or have any questions feel free to call, text, or email:

Michael Klarman

Champion Brokers

267 251 7649

[email protected]

Texas is one of those states that all national lenders will lend in plus those markets in texas are usually investment hotbeds and there are a slue of local HML. If you have good credit and some liquidity the lending requirements are pretty much met, the real problem will be sourcing, rehabbing, and exiting. I always tell people the money is very binary for the most part. Either you're coming with the credit and the capital or not, if not then getting funding will be difficult if you do check the boxes then you have options my friend.

You need to put the property in an LLC and then you'll need to wait 6 months to season it. Then you go to a HML and do a refi with rehab. They will appraise the property for an as-is value and an ARV value. They will supply in a loan 80% - 85% of the as-is value plus the rehab funds to finish with the loan not to exceed 70% - 75% of the ARV.

Let's say the home is worth 800k.  You can probably get a loan for 560k.  250k of that would be rehab money and the 310k would be your cash out of the asset.  I do these loans all the time for people. 

Ive seen it all too many times.  Deals look ok on paper, in theory, it looks like the investor should make money and then the deal plays out in practicality and all the intangibles hit and go against the investor and they get pummeled.

Agents/wholesalers inflate comp packages, GCs underbid estimates to get the job, market conditions can change from when you started till when the for sale sign goes up.  People end up in some horrendous scenarios.  In over their head, trying not to lose it all instead of winning anything. 

I think these educational platforms that glorify isolated results  and try to set them as a norm have lots to do with it.  I can't tell you how many times people told me they are breaking in to investing and they don't wanna use any of their own money and they heard its possible from a podcast.

My answer is usually for them to call the podcaster and see if THEY would like to stake you.

If your credit is 700+ and the project cost is sub 70%, you can probably find 85%.

But before I did anything, I'd have whoever is going to do the work do a thorough walkthrough with you and get an itemized budget together.

Then apply this formula:

P = Purchase Price

R = Rehab cost

ARV = After repair value

P + R/ARV < ?

I put a question mark because people put an array of numbers there. Some 75%, some 70%, if you can get under 70% that's best. If you get close to 60% then it's a great deal. Under 60% it's a home run and under 50% is a pure steal. At 75% it can be hit or miss, once you go over that you are on a slippery slope and if your construction runs longer and costs more (which happens A LOT), and then you miss your appraised ARV by 10% - 15% (Which happens A LOT), then you will lose money.

With no liens this is easily done through a quitclaim deed. With a lien, it gets very sloppy and sometimes is not doable. I have seen it done by putting an entire LLC up for sale, with the property it holds its only asset.

If you are a beginner with questions...

If you are a novice that wants to run a deal scenario past someone...

If you are an investor looking for a reliable, accessible money source....

If you are a broker holding a difficult deal you can't get done....

I can get any kind of deal done from your basic fix n flip to your luxury ground up and everything in between. Whether it is commercial, mixed use, Hotel/Motel builds, rural deals, or anything under the sun. 

Whether you have financing needs, want some pricing, or have any questions feel free to call, text, or email:

Michael Klarman

Champion Brokers

267 251 7649

[email protected]