All Forum Posts by: Jean T.

I came across Virgin Money a few months back. They seem to basically provide the paperwork needed for loans between friends and family. Months ago, it seemed that had just started, but apparently, they purchased CircleLending.

At any rate, I'm now looking for private lenders for my real estate business. I've used hard money for the couple deals I've done thus far. I'm thinking that this service could be used to make sure that you have the proper paperwork with private lenders. In light of the potential coming regulations, thanks to Bernie Madoff, I think it will become important to ensure you have your paperwork set up properly with private lenders.

I've seen a number of questions on BP about people not being entirely certain about how to set up a relationship with a private lender. I don't know either. You can do all the reading and research you want, but won't really know how it all works until you do one yourself. So I'm wondering if anyone on BP has used the services of Virgin Money to borrow or lend money. If so, how did it go? What do you think of them?

Hi Nick,

I'm in Livonia. When I can, I go to the National Real Estate Network run by Mark Maupin. They meet every 3rd Thurs, often times in Livonia, but they can have meeting in Detroit too. There are many other smaller groups around here too. You should check out the link on BP:

http://www.biggerpockets.com/real-estate-clubs/michigan.html

Because of time constraints, I haven't been to a NREN meeting in a while. Much of the advice and networking I do comes from being on BP. I would like to meet some other local investors to share experience and knowledge with.

Josh:

I already have a tenant in the home, so I guess that's the positive out of this. The issue is that I have to get out of hard money loan I'm in. I'll have to look at a local portfolio lender.

Robert:

I'm investing in Detroit. Since you're in Michigan, I'm sure you know what that's like. I take no offense to what you said. I agree with you that it makes sense to work with one lender who knows me personally in this market. But I guess that probably means I won't be working with a mortgage broker. In fact, my broker is in the process of working with another lender, but I'm not too optimistic anything will come out of that. Like you said, it's not a lender problem....it's an appraisal problem.

I don't know if you know an appraiser in Detroit, but I'm not clear how a lender would trust his appraisal compared to others. Don't the new rules apply here too?

I've read a number of posts here trying to find something similar to my current issue that is fairly recent. But I didn't find anything so I figure I'd post one.

The short story is that I'm trying to refi a property I rehabbed, and now I'm told that it only appraises for $22K, which is about $40K less than what I have in the home. I'm not sure what to do next.

The long story is that I purchased and rehabbed a property for about $65K. After waiting for the 6-month seasoning, I started the refi process about 3 months ago, working with a mortgage broker. We've gone through a few lenders. We were able to get one, and our appraiser appraised the home at about $90K. That was lower than expected because another one of my properties appraised at $105K just a couple months earlier.

Anyway, the lender didn't like the appraisal because it included properties over the previous 6 months. Apparently, because of the recent changes by Fannie Mae, like this new Home Valuation Code of Conduct, the lender wanted our appraiser to find 3 or 4 properties from the previous 3 months. Because of the market, they were not to be found. As a result, the lender sent out one of their own to do a field review (drive-by appraisal).

To my shock, the home appraised at $22K. I know house values have gone down, but anyone who drives around the neighborhood can tell that those homes, including mine, are worth more than $22K.

So my question is what are my options now? Has anyone run into something like this? I know its difficult refinancing in this environment, but I have to think that someone's doing it. Anyone?

Diane,

Thanks for the info. I would be buying and holding the note. Part of my purpose for partnering is to have the contractor front the construction cash, if possible. Obviously, I would be open to negotiating that if needed.

Thanks again.

This investor who you partnered with, is this someone you know? Or was this person originally a stranger who you came to know and felt comfortable enough to do a partnership with?

I completely agree. I would figure that the contractor would get a majority percentage of the profit. From my standpoint, I'm okay with that, as long as I structure the deal such that I account for the contractor's profit and my profit

In these times, when getting loans seem to be getting more difficult, I was just thinking that this could be a way to get into a deal with little or no money down, depending how you buy. Obviously, there's still some risk, the least of which, is the relationship with the contractor, as Diane mentioned in her post. But I think not having to worry about securing funds for a rehab in this market should be pretty helpful.

Has anyone out there ever partnered with a contractor to do a rehab? In this situation, I'm thinking that you buy the property (using whatever means) and the contractor rehabs the property for a percentage of the profit.

A friend of mine was telling me that he knew someone who did this in Pennsylvania. Things went okay for a while, but the contractor ended up taking advantage of the investor. So I'm curious to find out who've done these kinds of deals with contractors and what the outcome has been.

I purchased a 3BD, 2BA property on a land contract about 4 months ago. I am a new investor, so things have been going slow for me. The land contract terms are no payments for 6 months.

The initial thought was to rehab this property and re-sell or do a lease-option before the payments start. But in this current credit market, I have not tried to get a rehab loan, as I've been afraid of how this can affect my ability to refi out of two other properties I rehabbed. It is now 4 months, and I haven't started anything on this property.

It just dawned on me that maybe I should consider wholesaling the property to an investor. Since that wasn't my original focus, I'm not very familiar with wholesaling.

Is there any advice for me out there on wholesaling a property that I have already purchased on land contract? Anything to watch out for?

Many thanks.