All Forum Posts by: Ron Biggs

First off welcome to bigger pockets! The comments are correct you are getting great advice! I have fell for things like this more than once and hearing your stories made the alarms go off in my head. Best of luck!

Originally posted by @Ron P.:

The OP started with the notion that hml's are better for newbie's because they can vet the deal and borrower where a private lender cannot.  I agree.  I would like to add that hml's also vet the lender for suitability where a private lender (or newbie borrower) cannot.  A hml brings the two parties together, both need vetting.  Here in CA, a licensed hml is required by law to ensure the private lender meets a very strict suitability standard.  This is a good thing.

Private lender's ALWAYS drool over any roi greater than 1%, without regard to risk.  Newbie flippers ALWAYS overestimate purchase price and arv, and ALWAYS underestimate costs and time - did I say ALWAYS.

Of course there are bad actors in the lending business - what - and there aren't in the legal profession, or accounting profession, or rei profession.

Ron, This Ron agrees with you!

Originally posted by @Jay Hinrichs:

@Ben Leybovich I am going to stick to my perspective that you have not been a HML and really don't understand that no HML that is ligit wants to make a loan to own.

And the amount of HML that are sharks with the purpose to steal property from borrowers may exist but it would be extremely rare.

were was this property.. if it was in your state which I beleive is a mortgage state it would take said HML 1 to 2 years to get the property back.. by that time its probably stripped or in some state of disrepair and costs thousands of dollars.

this person could have been talking to one of those ( your approved just send me 500 dollars for due diligence) and then they never hear back from them and lose the money  plenty of those guys around

I agree with you as my experience with HML's has been very good! But of course we should all make sure the lender is good, the property is good, the area is what we want etc.

Originally posted by @Account Closed:

Since this post is targeted at newbies (I consider myself VERY new to all of this!), definitions of terms & syntax are of increased importance. I see a number of terms used without "support" (definition), starting with the original post. Anyone care to proffer a little clarification on Private Money vs. Hard Money? Some very useful information can come forth in defining terminology. Thanks!

Devon,

Tons of info right hear on Bigger Pockets on Private/Hard Money and just about everything else!

Well said!!

Ali,

You are correct I should have made that clear but I was speaking about flips. In fact when I first got ready to make the post it was titled "Don't use Private Money for Flips" but was pulled away and when I started over the Flip got left off.

 Hard money could be used for the temp. financing for a buy and hold but you would need to get some more cost effective money for the long term.

Thanks for the clarification!

Hard Money is based on the property. So you can talk to a hard money lender but the funds wont be confirmed until the property is! Hope that makes sense!

But go ahead and start the relationship with a hard money lender.

Bet that got your attention!

Don't get me wrong  I am a huge believer in using private money but I would recommend that newbies not use it!

WHY?! You may ask! Private money is great and will take you far but if you are new and especially if your private lender is new (such as a friend or family member) and depending on you to take care of their money I would recommend a Hard Money lender!

A hard money lender normally knows how to evaluate a deal better than the newbie and will make sure the funds and you are protected. The Hard Money lender I have used the most in Richmond looks at every property he lends on and has rejected a lot of deals (not mine by the way since I was at this business for 15 years before I met him) but this keeps the newbie out of trouble. A few years back I picked up a few houses from him that other investors could not complete and then he got even stricter on  making sure he was protected.

Now by doing this and protecting the money he was lending he was also protecting the investor and the peoples money he was working with. So it turns out to be best for everyone!

So my recommendation would to do a few deals with a hard money lender first and then start using private money. Yes you will probably make less money but it will also help keep you from losing it all!

My 2 cents worth anyway!

Hello all,

We are looking into hiring a property manager to handle our rentals in the Richmond VA market.

Looking for recommendations and would appreciate some suggestions.

Thanks,

Sounds good please contact me and lets talk.

Thanks,