All Forum Posts by: Randy Sommers

Not familiar with Dorran Summers, but I know a lender that does transactional funding at 1%, but the loan must be between $100,000 and $500,000.  Can do lower than $100,000, but with a minimum fee of $1000.00, the percentage goes up the lower the loan amount.  They can do over $500,000 as well, but likely greater than 1% 

If the property is already ready to go, then a BRRR is not a likely solution. I am going to guess you are unable to get traditional financing, which is why you are going the hard money route. There are several companies out there that will do loans for up to 5 years and even for 20 to 30 years, which could be a better fit for your circumstances.

You could consider another rental investment as well, possibly in a less expensive market depending on your risk tolerance. This would allow for more cash flow

In my experience staying hands off is fairly typical, I expect that you plan to have more than just one rental so the cost of being hands on would keep increasing and subtracts from your bottom line.  A big consideration is what is the highest and best use of your time and to focus on that.

I am aware of several companies that would do this type of deal

Your level of involvement will be dependent on your risk tolerance and your confidence level in your property inspector and property management company.  Some investors have never personally seen the property that they own.  It is not necessary to be present for the closing as that can all be done remotely.  If you are going to have a property management company, which I would recommend, then there should be no need to meet potential tenants or handle serious tenant issues, as those should be handled by the property management company.   Generally any periodic inspection will just be to the outside, rather than disturbing the tenants and if you have friends and family in the area, you could just have them check it out for you, letting them know what to look for. 

Most hard money lenders will have an appraisal done as part of the process and the appraisal will come in prior to your closing.  Hard money lenders like to mitigate their risk as well.

Although I generally work with hard money, I would expect the private money to be laid out along the same lines as indicated by Kyle. The idea is to have a mutually beneficial set up for both of you. Which is why it is a yearly APR and why interest payments are usually monthly and interest only. The shorter time for you for the loan the better your profit. The shorter period for the lender is not an issue, because the can then turn around and loan out again and will likely end up with that 10% during the course of the year. And it might even be with you as you would be involved in more than one flip

Most lenders will consider this a commercial loan due to being mix use, so that would tend to be higher interest rates and more down payment. One lender I am aware of still has the same interest rate--starting at 7.49%, but has a minimum loan amount of $250,000 as opposed to $75,000 for a residential SFH to quad.

I have a duplex in St. Louis MO and it is insured through Farmers Insurance and it is reasonable.