All Forum Posts by: Sarah Reece
Sarah Reece has started 2 posts and replied 18 times.
Post: Purchase Money Second for Owner Occupied
- Posts 18
- Votes 8
Hey all! Anyone know of an institution/bank/whatever that lends in WA state willing to do a purchase money second up to a 90% CLTV? Found an awesome assumable first, but need to bridge the very large gap in funding... NOT looking private money or HML due to owner occupancy
Post: Looking to Move into the Hard Money Space - Feeling Stuck
- Posts 18
- Votes 8
Quote from @Stuart Udis:
One thing many who enter the alternative lending space fail to consider is who is their target borrower? Why will they decide to borrow from you over the thousands of other banks and alternative lenders out there? The more established borrowers with a track record likely have their banking relationships in place so how to you earn their business? They are most likely going to be the better borrowers, with greater success rates on execution along with likely having access to better deal flow and thus the better collateral. Often times those who enter the alt lending space wind up with novices as their customer base with poorly located collateral and limited experience. Sure the underwriting can be done in a way to ensure the LTC is low but do you really want to own that asset in the event of a default? Sometimes it makes more sense to invest through a debt fund that has operation systems in place and most importantly relationships with more established borrowers. I am not here to endorse any particular established alt. lender, just something to be mindful of.
Post: Looking to Move into the Hard Money Space - Feeling Stuck
- Posts 18
- Votes 8
Quote from @John Mason:
@SarahReece do not know them but maybe research on companies like this https://pinefinancialgroup.com/investors/become-hard-money-l...
Post: Looking to Move into the Hard Money Space - Feeling Stuck
- Posts 18
- Votes 8
Quote from @Shafi Noss:
Are you planning to hypothecate?
Not at this point, I am looking at short term 6 -12 month loans and if I understand hypothecation it works better with longer notes. I will admit though, I just like saying the word "hypothecation" because I feel really smart when I do 😂 and right now I am feeling a bit, um, unknowledgeable...
Post: Looking to Move into the Hard Money Space - Feeling Stuck
- Posts 18
- Votes 8
Quote from @John Mason:
More info at the bottom of this thread https://www.biggerpockets.com/forums/49/topics/1188012-how-d...
Post: Looking to Move into the Hard Money Space - Feeling Stuck
- Posts 18
- Votes 8
Quote from @Kenneth Garrett:
To be a private lender you need to be able to analyze deals. Is the borrower a flipper, BRRRR investor or rental investor? The type matters and their plan on acquisition and exit strategy. Typical documents are a mortgage or deed of trust (depends on your state, I believe Washington is a deed of trust state), and a promissory note. You are now the bank with all the protections of foreclosure procedures.
I always have my attorney prepare the documents. Analyzing the project is critical. Success of the borrower. How many homes have they flipped? Tell me a project that went off the rails and how did you get it back on. It all about what if something goes wrong.
Best of Luck.
in a previous life I was a mortgage underwriter, so I have*some*knowledge, however I was borrower focused and need to change to be asset focused.
Post: Looking to Move into the Hard Money Space - Feeling Stuck
- Posts 18
- Votes 8
Quote from @Jordan Tinning:
@Sarah Reece Beth Johnson hangs around all the local REI meet ups here in wa. I'd get involved in the investor community here if you haven't already done so. Lots of people already doing what you're thinking about doing who are help to provide help.
Post: Looking to Move into the Hard Money Space - Feeling Stuck
- Posts 18
- Votes 8
Quote from @Joe S.:
Quote from @Joe Davis:
Quote from @Sarah Reece:
After a lifetime in residential real estate I'm finally wising up and wanting to diversify a bit and start dipping my toes in the HM/PM space. I've got about $400k to loan and if I can prove my model to myself, I have access to another $1m in cash. I am getting clear on my buy box and hoping to stay local (WA state) with my lending. With all that in mind, I'm assuming that my first step is to create an LLC entity for protection and then have an attorney create a loan package with a note...right? I posted on a local group asking for attorney referrals and got some responses about my plan that made me question if this is infact what I need to do to start as a number of people said escrow will create these docs for me.
What say you oh wise ones with experience? What are my first moves to take action?
Sarah, I am a small local direct lender in the Houston area. When i started out the hardmoney mastermind with Jason Balin and Chris Haddon was extremely useful. A lot of lenders of various sizes on there that can help with some of the logistical questions, software, contracts, recommendations etc.
I also have quite a few good book titles on getting into lending.
My plan is to lend my money only at this stage. I'm open to evolving down the road, but as I am new I don't want to risk anyone else's funds just yet.
Post: Looking to Move into the Hard Money Space - Feeling Stuck
- Posts 18
- Votes 8
Quote from @John Mason:
Thank you John! Signing up now...looks like a program and community that will really help.
Post: Looking to Move into the Hard Money Space - Feeling Stuck
- Posts 18
- Votes 8
Quote from @Joe Davis:
Quote from @Sarah Reece:
After a lifetime in residential real estate I'm finally wising up and wanting to diversify a bit and start dipping my toes in the HM/PM space. I've got about $400k to loan and if I can prove my model to myself, I have access to another $1m in cash. I am getting clear on my buy box and hoping to stay local (WA state) with my lending. With all that in mind, I'm assuming that my first step is to create an LLC entity for protection and then have an attorney create a loan package with a note...right? I posted on a local group asking for attorney referrals and got some responses about my plan that made me question if this is infact what I need to do to start as a number of people said escrow will create these docs for me.
What say you oh wise ones with experience? What are my first moves to take action?
Sarah, I am a small local direct lender in the Houston area. When i started out the hardmoney mastermind with Jason Balin and Chris Haddon was extremely useful. A lot of lenders of various sizes on there that can help with some of the logistical questions, software, contracts, recommendations etc.
I also have quite a few good book titles on getting into lending.