All Forum Posts by: Richard Mark

Hey Deonte. Speaking from a hard/private money perspective, its uncommon for any lender to do a 100% LTV loan for borrowers, let alone a borrower they haven't worked with before. It would require you putting up additional real estate to collateralize. That said, if the property is habitable and your documents are all in order, its not impossible that you could get a portfolio loan from a more traditional lender that could provide the cash needed. Yet again, you will need to have other assets to collateralize or at least some cash to put up front. As you know there are tons of lenders with different programs who might be able to get creative with you to make something work.

What are people experiencing for upfront fees on hard money right now? We've seen lenders charge nothing upfront apart from an appraisal fee (if its even applicable), and other lenders charge $2000+ for underwriting, processing, and other misc. fees prior to or out of closing on top of points.

Second, are people finding that these fees are charged prior to closing? Especially lenders that don't require appraisals, I can understand charging a fee upfront as a small commitment to not shop the deal.

Glad you asked this, this needs to be talked about more... especially for new lenders who don't have the capital right away to pay for additional services. Definitely work with you insurance agents and title reps on each deals on how they handle document transfer security. 

Mortgage Automator, Liquid Logics, and Loan Servicing Soft are a few of the popular ones. You can find some cheaper ones that are fresher to the market/more AI integrated, but those are pretty new so there may be some speedbumps to work out on them. No matter what, if you are originating & servicing 10-15+ loans then its worth the cost to help you grow.

Sounds entirely possible from a lenders POV. Its super important to do lots of research on Section 8 and qualifying your property/your tenants for those rents... its worth talking to someone whose been through that process before who knows the local regulations and important persons to contact in order to get that done. As a private lender, my first concern would be the risk involved with regulatory agencies you might deal. Disclaimer, I am based in CA and this process can be cumbersome in my experience.

Reach out to originators or local reps and meet them in person. Building rapport is just as important for you as it is them, everyone enjoys working with people they like & know beyond your stats on the loan application. For banks, opening an account is an easy way to get started, & do it in person. For private lenders, reach out to some local lenders and ask to meet at their office or a local coffee shop to get to know them. Especially for private lenders it is super important to learn what types of loans they do and how they fund loans (personally, other investors, via a fund, etc.)

Hi Anthony, great to hear your thinking this through, I can share what I'm doing but definitely ask your CPA. My strategy has been a 50/50 mix between HYSA and mutual funds/other favorite stocks. Most of the advice I have received is to, at a minimum, segregate the funds you plan to use for the house from your other investment/savings so that its easy to track what you've saved and your taxes in the end. 

Its also important to look at your time horizon to evaluate risk. If you're still 3-5 years out, then I would allocate more to equities than HYSA because if the market takes a hit you will have time to recover. But if your looking to buy within the year, I would opt to place more in the HYSA so you avoid potential short term losses since the market is a bit uncertain at the moment.

Hey Joe, good question. I'm in the private lending space in California so can speak from our experience recently. We have kept our rates the same in all our deals, but are lowering the our leverage thresholds by 5% to hedge against potential market disruptions in the coming months. For ex. land purchase we are usually at 50% and are now quoting 45%. Fix & flip we were at 80% LTC and are now at 75% LTC. We haven't had much pushback from our borrowers (real estate investors) to our surprise. 

Hi Jack, the 30 yr fixed rate at 8.5% seems high to me. A common option I see for people to bridge this gap is to collateralize another property and get a cash out loan, although rates depend on what your are purchasing the new property for (primary resi vs investment property). I would also look into getting a HELOC/refi if you have other real estate you wholly own.

Another thing to consider is the possibility of a portfolio loan on all your assets, but that might come with some extra complication depending how your interest in the syndications is structured.

Hi Tristina. Totally depends on your current debt on your primary and investment properties. Also important to consider how long you need the money and if you want the ability to tap into it again. 1- primary resi HELOC could work since there is not usually prepayment penalties and you'll have access to it later, but cash out is usually a better option for rates and one time use. 2 & 3- taking a 2nd lien is also a good option if you plan to refi pretty quickly and you can get no prepayment. Having the rental income on house 3 should help with rates.