All Forum Posts by: Tom Kern

Bryan, I am a hard money lender in Richmond VA. My attorney, Page Allen, works exclusively with small real estate investors. It is 95% of her practice. Page has had her own firm for about 20 years and has just a few staff. Small firm with great service. Her firm is really easy to work with and has great rates. Call Page at 804-794-6161 and tell Page that her #1 client referred you.....LOL....LOL. Tell Page that you want her best paralegal named Lindsey to handle your work. Lindsey is awesome! Call me at 804-304-1228 if you need additional information or have any questions.

Barrington, I am a hard money lender in Richmond VA. Send me a message and I can help you with that.

Hey Brian, come out to the next Richmond REIA meeting on August 1 in Glen Allen. See http://www.meetup.com/rvareia/ for details.

Ben, just as Karen stated, the title work and dealing with any liens is what typically holds the purchase closing up. If there are no title issues then a HML should be able to fund the deal pretty quickly or comfortably in a week. Local HMLs with the loan decision maker in town can fund deals much faster than out of town HMLs. I don't like to run fire drills but I have funded deals in as little as four business days after first being contacted about the deal. An out of town HML could never pull that off.

There are different ways that HMLs fund deals. HMLs commit to funding the purchase and part or most of the rehab $ but typically hold back this rehab $ and disperse that $ as work is done. Since the rehab $ is being set aside by the HML the HML charges the Borrower interest on this rehab $. HMLs handle the safekeeping of rehab $ in different ways. Some set aside the rehab $ in their own account and disperse as work is done. However this practice could lead to double dipping where the HML behind the scenes is lending out some of this rehab $ for other deals. Still other HMLs escrow the rehab $ with an attorney which is more transparent. I practice the latter.

Hope this helps.

Ben, I am a hard money lender who does business in VA. Here is my two cents for what it is worth. If you were in my trade area and showed this deal to me and I agreed with your numbers then I would lend 65% of ARV or $318,500. This would mean your skin in the game would be $16,500 ($260,000 + $75,000 - $318,50) plus closing costs (points and other customary closing costs). If you are dealing with a hard money lender (HML) who does not know you but does know that you have a lot of cash then he might want you to have more skin in the game because you have the skin.

Other factors that influence a HML is the comfort level with funding a home that is not a first time home buyer home....which could lower the loan to ARV % from 65% to 60% for example. First time home buyer homes sell year round in our market but people moving up typically do not sell as well year round since these buyers have children and want to move in the summer.

On a profitable deal using debt/hard money is always cheaper than using equity/ partnership split. Your hard money terms are reasonable. An equity partner that funds 100% of the deal is going to want 50% of the profits. Run the numbers on a spreadsheet comparing the two options to see for yourself. I have compared the two on a spreadsheet before and you will net 2/3 to 3/4 of the profits using hard money and only half using partner (s).

Alex, welcome to BP! I live in the far west end of Richmond. You need to come out to the local Real Estate Investment Club meetings. Go on meetup.com to check out upcoming meetings.

Chris, I think you are looking at Richmond REIA meeting which is full. The RING meeting this Thursday is not full, see http://www.meetup.com/RichmondRING/

Tom Kern
Richmond Rehab Funding

Bobbie, welcome to BP! Say hello to Sharon, Sean and Kim for me. Come out to the next RING meeting (Real Estate Investors Networking Group) on Thursday night March 14 at 6:15 pm at the Tuckahoe Library at 5001 Twin Hickory Road in Glen Allen. I am sure Sharon and Kim will be coming.

Tom Kern
Richmond Rehab Funding