All Forum Posts by: Odie Ayaga

@Ned Carey my interpretation is that he is purchasing the property from a family member (not necessarily parents) outright and rent out part of the property for cash flow. That would still make him ineligible for hard money.

I am curious, though, if you've had experience with the situation you described. I would think that wouldn't work either. What would he be getting the loan for if it were his parents' and he were renting there and didn't own it?

They are lending based on LTC (loan to cost). This is not at all uncommon and I worked at a lender that always refinanced based on LTC regardless on the amount of time the property was owned. I always told potential borrowers up front that they'd be best served to find a lender who refinances based on ARV. That is what you need to look for. There may be less of them out there in this climate, but it's worth calling around.

If you're going to move in hard money isn't an option since hard money is for non-owner occupied properties.

Yes it is we got 100% financing on our first deal, but it isn't advisable if you're only doing it because you have no money. You still need money for various costs you will incur.

Welcome @Brennen Finchum and congrats on getting started! Even at 100% financing from a hard money lender I always tell people you'll probably still need at least 30K for fees, rehab draws, closing costs etc. If you aren't there, no problem just keep building your bank account or look into working with a partner and in the meantime keep learning and networking. Good luck!

Welcome to BP @Michael Edwards! What draws you to fix and flipping?

They always wanted the borrower to have some skin in the game such that they wouldn't end up netting cash in their pocket plus a property

So first I'll say hard money isn't cash and savvy sellers won't accept it for a cash only property. Having said that, if you do encounter a seller that will could you explain what you're looking for? The process isn't really any different than any other loan. You get an appraisal, inspection, insurance closing...

Yea it isn't too difficult to find a lender that is higher than eighty. My go to lender is at full financing

@Mark Luehring-Jones I will say that's not necessarily true. Having worked for a hard money lender our long-term loans were always based on LTC no matter when they were bought and I know others also operated in the same fashion. Also, plenty of banks will only consider LTC until the seasoning period is over so even if you claim you did X amount of work bringing the value up to something else they still aren't going to give you that on a loan. I also just came from another post where a lender backed out because the property recently was purchased a certain amount and they were trying to purchase at a much higher amount because it's market value is currently higher.