All Forum Posts by: De'Shawna Graham
De'Shawna Graham has started 4 posts and replied 8 times.
Post: how to get them to lower the purchase price.
- Fayetteville, NC
- Posts 8
- Votes 0
Post: Buy Foreclosure or REO as Primary house
- Fayetteville, NC
- Posts 8
- Votes 0
Post: What are some of the best ways to find Private Lenders in the NC?
- Fayetteville, NC
- Posts 8
- Votes 0
Hello @David Seroy,
Originally posted by @David Seroy:
Similar thoughts to what everyone above mentioned, it is doubtful any legitimate lender will take a junior lien position. You should search for a lender that will fund both acquisition and renovation on the property. If you need additional funding on the current project, you could just finance DoHardMoney out of the deal. The fact that DoHardMoney will not loan renovation funds, is a pretty big flaw. Modern day HML's who work with real estate investors assess a property based on it's ARV, which allows borrowers to get capital for the entire project.
For example, if someone is purchasing a property for $100K, renovating it for $50K and expected ARV (After Repair Value) is $200K, then a lender may approve a loan for $150K. Even though that $150K is greater than the purchase price, the loan would be structured as a draw loan. Meaning, perhaps $100K is provided up-front upon purchase, then the remaining $50K stays with the lender in escrow and the borrower can draw on it as they complete repairs. So, maybe the borrower finishes demo does some framing, then draws $10K on that loan.
This way it allows borrowers to be fully capitalized, but protects the lender from over-committing capital until the property has progressed, therefore increased in value.
This is a very basic example, but it should get the point across. If the property is increasing in value, then a lender mostly will not care if they give more money into the property. Essentially, when you're flipping a property, you are quite literally and figuratively building equity into the property, which allows a lender to disburse additional funds.
Feel free to connect directly if you have any other questions. Hopefully that helps!
Post: What are some of the best ways to find Private Lenders in the NC?
- Fayetteville, NC
- Posts 8
- Votes 0
Thanks @ Alexander Felice. Yes, making sure that we have enough working capital up front. Is the problem. So far, I'm in the process of working out contracts for potential investments, but it seems like we will almost need to completely free up our personal credit lines to cover cost of the rehab. I have talked to many different companies so far, and where they tend to stop me at the door is when I say it's our first flip. Then they stop listening. Not even looking at the numbers of our potential investment. I do see in Fayetteville they have a meeting with the local investors coming up. I will definitely try to be in attendance. Thank you for your help!
Originally posted by @Alexander Felice:
First, undercapitalization is the number one error new businesses make. So important to have enough capital upfront.
I also invest in Fayetteville and there is plenty of private money in that town, just gotta network and sell your idea. I've met and borrowed money from people I met here on BP in Fayetteville just by building relationships and helping out. It's possible
Build your network, build your track record. Also there are a TON of flippers in Fay and they are growing, lots of competition means you have to dig when starting out because you're out-experienced and out-funded.
Despite this, keep at it, you can do well in that town. Just takes some time maybe
Post: What are some of the best ways to find Private Lenders in the NC?
- Fayetteville, NC
- Posts 8
- Votes 0
We are start up investment realty company wanting to flip homes in the Fayetteville area. I have gotten the initial investment capital from Do hard Money, Lending company. Just to get my foot in the door for our first flip. The more challenging part is funding the working capital for the rehab. What are some of the best practices for this as a start up company. Are their some private money lenders that might take a chance and be 2nd on a lien? Any suggestions?
Post: I'm looking for Contractors in the Fayetteville, NC area
- Fayetteville, NC
- Posts 8
- Votes 0
I'm looking for referrals for General Contractors in the Fayetteville, Area for rehabs deals that I am currently working. We are beginners to rehabs and investment properties, but have had experience working with a general contractor working on renovations to our home. If you know someone who is interested please reach out.