All Forum Posts by: Stanley Yeldell

Great to see you're exploring private lending, Steve — it’s a powerful way to put your capital to work. Your concern is totally valid: a $2,000 legal fee on one small loan can eat into returns fast. Here's what you're missing (and how to make it worth it):

The First Contract Is an Investment: That initial $2k is for a reusable template. Once you pay for that first attorney-drafted note and mortgage/deed of trust (with your preferences), you can reuse it on future deals with only minor edits. Think long-term ROI.

Scale Matters: On $30K–$50K loans, legal fees do shrink returns. But if you're doing multiple loans, or larger ones ($75K+), the cost becomes negligible over time. Consider building up to that volume.

Alternative Paths:

Use existing templates from real estate investor networks or colleagues (still have a local attorney review it once — cheaper than drafting from scratch).

Partner with a private lending broker who already has docs in place and takes care of compliance.

Security Matters: That $2k isn’t just paperwork — it protects you with enforceable terms, foreclosure rights (if needed), and proper lien positioning.

Bottom line: if you’re doing this as a one-off, it’s probably not worth it. But if you plan to lend regularly, that legal foundation pays off quickly.

Happy to share a few template examples or intro docs if you want a starting point!

Great questions, Christina! Here's a quick breakdown of your options by property type:

House 1 – Primary Residence:

A HELOC (Home Equity Line of Credit) is usually more flexible and has lower closing costs than a cash-out refi. Great for short-term use and interest-only payments.

Cash-out refi might be better if you want a lump sum and prefer fixed payments, especially if your current interest rate is high.

Other options: Home equity loan (fixed-rate second mortgage) or even personal loans, though rates are higher.

House 2 – Former 2nd Home (now vacant):

Yes, a cash-out refi is your main option, though rates and LTVs are more restrictive on non-owner-occupied homes.

You could also explore a DSCR loan if you're planning to rent it out soon.

House 3 – Rental Property:

Again, a cash-out refi works here.

Also consider a DSCR loan, which focuses on property income rather than personal income — especially helpful if your DTI is tight.

Since you're using this to fund House 4, make sure your cash flow and reserves are strong enough to support your entire portfolio. Also, some lenders cap total exposure if you're borrowing across multiple properties.

Happy to chat more if you want lender recs or deeper strategy tips! 🏡💰

Great question, Andre! My first private money deal came from simply talking about my real estate goals with people in my network. I didn’t pitch anyone — just shared that I was working on a flip and needed funding.

A friend of a friend heard and introduced me to someone who had money sitting in a retirement account and wasn’t happy with the returns. We structured it as a 12-month note with 10% interest, secured by a first lien on the property.

The deal went smooth — a cosmetic flip that finished ahead of schedule and under budget. I paid them back early with full interest, and they’ve reinvested with me since.

Lesson learned: money follows opportunity, and people want to invest in something safe and local. Be transparent, have your docs and numbers ready, and protect their capital like it’s your own.

Would love to hear how others got their first lender too!

Hey Eric — thanks for the detailed breakdown. You’ve done a lot of the heavy lifting already by converting and pivoting strategy, and it sounds like there’s solid equity in the deal.

A few thoughts:

DSCR lenders generally base LTV and rates on market rents, not projected STR or room-by-room figures. So if the market rate is $9K/mo, that's likely the number they'll underwrite against. That could affect your ability to hit 80% LTV unless you can show leases or STR income history.

Since time is tight and your credit is dinged, I'd suggest looking at non-QM lenders that are STR-friendly. Some lenders I've seen work well in these situations include The Mortgage Shop, Visio Lending, and Host Financial — they're experienced in STR/DSCR loans with flexible underwriting.

You might also want to bridge temporarily with a short-term refi or extension from your HML, especially if getting a DSCR closed before mid-June becomes tight.

Let me know if you'd like an intro to a DSCR lender with STR experience — I can help connect you to someone that moves fast.

Happy to connect!

Great questions, Christina! Here's a quick breakdown:

1. Primary Residence:

A HELOC can be a great option if you want flexibility and interest-only payments initially — especially if rates drop later and you plan to refinance anyway. A cash-out refi works better if you want to lock in a fixed rate and consolidate higher-interest debt. You can also explore home equity loans (fixed-rate, lump sum) if you prefer a structured repayment.

2. Investment Property (vacant):

Since it's not rented, lenders may view it as higher risk. Cash-out refi is likely your best option, but you could explore a DSCR loan if you plan to rent it again soon — some lenders will use market rent projections.

3. Investment Property (rented):

Definitely look into DSCR loans — they're designed for rental properties and don't rely on your personal income but rather property cash flow. Rates can be competitive and LTVs up to 75%.

If you're leveraging this equity to acquire a 4th property, just be mindful of your DTI and LTV thresholds across all assets. Let me know if you'd like lender recs or someone who can walk you through a few real scenarios.

In my experience, reputable hard money lenders typically do not charge substantial upfront fees, aside from an appraisal or credit check. However, we’ve seen some charge $1,500–$2,500+ labeled as “underwriting” or “processing,” which may or may not be justified depending on the lender’s internal process and speed.

When lenders don’t require an appraisal, a small commitment fee makes sense to ensure the borrower is serious and not shopping multiple lenders — especially in competitive markets. That said, any significant fees paid prior to closing should come with transparency and documentation outlining what the fee covers.

Bottom line: Borrowers should verify if fees are refundable, credited at closing, or non-refundable, and always compare apples to apples — low points but high fees can sometimes be more expensive than slightly higher points with minimal junk fees.

You need $7,000 for renovations on your FHA-financed primary home. Here are your best options:

FHA 203(k) Streamline Refinance – Lets you roll in up to $35K in repairs. Good if you're okay with refinancing.

Personal Loan or Credit Card – Simple and fast for a small amount if you can repay quickly.

Cash-Out Refinance – Refinance your mortgage and pull cash, but only worth it if rates work in your favor.

HELOC – Only possible if you have enough equity (unlikely soon after purchase).

Best Bet: Try a personal loan or 203(k) Streamline if you're okay refinancing.

🏢 Owner-Occupied 5–8 Unit Financing Options:

1. Commercial Loan with Seller Financing or 2nd Lien Help

Down Payment: Typically 20-25%, but you can negotiate seller financing for part of the down payment.

Use Case: You occupy one unit, rent out the rest.

Strategy: Ask the seller to carry 10% of the down payment in a 2nd position lien.

2. Bank Statement or DSCR Loans (Alternative Lenders)

Down Payment: 10–20%

Qualify Based On: Property income (not personal W-2s)

Pro: Easier qualification

Con: Higher interest rate than FHA

3. USDA or VA Multi-Unit Loans (Rare but possible)

Only for rural areas (USDA) or if you're a veteran (VA)

Can sometimes go above 4 units with VA if you occupy one and prove feasibility

🧠 Creative Tips:

House Hack a 4-unit now, then use the cash flow to save for a larger multi-family.

Partner with someone who brings the down payment — you bring property management and occupancy.

Look into local credit unions or community banks that sometimes offer better terms on small multifamily (5–6 units) than large national lenders.

Yes, you can place a lien on a property for a personal loan if the property owner agrees. Here’s how you can do it:

✅ General Steps:

Draft a Promissory Note & Security Agreement

Clearly outline the loan terms (amount, interest, repayment terms).

Include a security clause that allows you to place a lien on the property.

Have the Borrower Sign a Deed of Trust or Mortgage

This legally secures your loan against their property.

This must be notarized and often prepared by a title company or real estate attorney.

Record the Lien with the County Clerk

Go to the county where the property is located.

File the Deed of Trust or Mortgage.

You are now officially a lienholder in public records.

🔒 Things to Know:

Yes, anyone can place a lien with the owner’s signed consent.

Use a real estate attorney or title company to ensure the docs are enforceable and properly filed.

This makes your loan secured, meaning if they sell, you get paid out of the proceeds.

Would you like a sample promissory note and lien document template?