All Forum Posts by: Ryan Stout

@Brian H. Check out Fund That Flip, they are listed on here, just go in search, type that in and select companies

@Nghi Le that's great you found a good partner in your lender. I think maybe there was some misinterpretation to my statement. I believe everyone when starting out should have a great partner to lean on. Some of what you describe is the lenders due diligence and underwriting. We have lots of data to pull from so confirming ARV, rehab budgets, looking at contractors and the etc... help protect our position in the deal (all lenders do this, well at least the ones I have worked for) and are derived from the portfolio of projects that lender has done. This shouldn't be substituted for a mentor/partner.

I was referring to more so delays with permitting, construction delays, and generally the unforeseen that no lender can help with can become costly due to cost of funds as @Brian H. noted. So learning how to navigate the deal and building a winning team of professionals around you ( a good lender as you pointed out is a valued member of any great team) are key before using short term high cost funds in my opinion, by doing this it leads to shorter flip times and more money in the investors pocket, not that he or she shouldn't seek a experienced partner. I am lender so I don't ever want to advise anyone not to take my money, ha.

Just my personal experience.

@Demeko MorganThe provided link earlier is a great resource. I work for a "hard money" lender but we really position ourselves of more of a bridge between traditional hard money and crowd funding. I know in a previous post the words "high risk" were used but the risk are really  the same as a traditional mortgage just a way shorter time line as previously mentioned (with my company anyways).

I wouldn't recommend hard money for a first time flipper (just personal opinion) even though the speed and ease of the transaction may be appealing, too many things can go wrong on your first 1-3 flips that you really haven't encountered yet that could slow your liquidity event and cause defaults or costly extensions. My view is hard money lenders are great resources to have in your back pocket to help scale your real estate business when you get into that position that you want to take on more deals but either your private network is tapped out or you want to move your personal money into another long term investment vehicle. Now of course there are many different strategies and opinions out there. 

To answer your question on it works. You submit your project application ( we lend based on project merit ) once its reviewed and meets the criteria we issue a term sheet for your review ( rate and term of loan ) once that is accepted then we require the initial upfront cost of the appraisal, etc... Once that comes back then it is like a standard mortgage were there title work is done and the closing is scheduled. 

This is our process in a nut shell but this can vary widely depending on what lender you use. Hope this helps you some.