All Forum Posts by: Timothy Hero

If you're looking for an actual hard money lending company, good luck. There's no money made for a company on such a low loan size. Assume they lend it at 12%. They borrower the money at 5%, so they're making a 7% spread on $40k. That's $2,800 over a 12-month period, and that's before they pay their UW and processor to handle the file + the loan servicing company.

Is the $9k closing costs including escrow? I have clients all the time tell me "closing costs is super high!". But between my broker fee and the lenders fees, it's usually 2-3% of the loan amount.

They're ignoring the $7k escrow for taxes and insurance, for example.

As for the rate adjustment, yeah, it's messed up move on the lenders part, but lets look at the math... $41/month. That's the difference. I'm not saying it's ok, but I noticed the smaller loan borrowers look the percentage change in rate and not the $ amount. I've had borrowers pull a lower credit than expected and rate increase by .25% on a $70k loan and he said the deal doesn't work anymore. The difference in his payment was $14.58...

Your main focus should be the closing costs. Find out if the $9k is escrow included.

I'll say this: I'm glad I failed as a Realtor in 2017 and mortgages worked out for me, lol.

I put myself in a position to adapt to all markets. When rates were super low, I did $18.3M. When rates doubled, I did $26M the following year.

Realtors who specialize on the buying side are about to be depleted. It's adapt or die in the world of entrepreneurship, and real estate is no different.

Correct. Not worth the headache and they don’t appreciate as much.

As someone who does mortgages in 45 states, no. The market hasn't "crashed". Sure, some investors are overly optimistic and value their properties 10-15% higher than the appraised value, but that's always been part of the game.

It's important to not look at the market in your backyard and think that determine the entire market. Folks have been fleeing super expensive places like Seattle and CA for places like AZ, TX, and FL.

It's a game of supply and demand, like it's always been.

Also, praising folks for being correct the last two doesn't make sense. What if he predicted it 15 times and it finally happen? It's like Robert Kiyosaki. He predicts a crash is around the corner often. Months go by, it doesn't happen, then he deletes the tweet. Eventually it will happen and he'll demand praise for being a genius.

I'd put $200k towards a down payment + closing costs. I'd keep $100k in reserves.

$200k should give you purchasing power of around $800-900k, once factoring in closing costs and escrow.

If you get good deals, maybe you get forced appreciation equity.

Even if the LLC had credit, DSCR lenders always go off your personal credit, but as stated above, yes, you'd have to PG it. If you make your payments as expected, there's no more risk than doing a normal mortgage. The loan isn't on credit, which helps the DTI.

Just make sure the lender doesn't make you sign an Equity Pledge Agreement at closing.

Fix and flip loans with hard money lenders and DSCR loans don't look at work history, DTI, taxes, etc.

Many lenders got rid of HELOC's when COVID happened. We saw lenders requiring a 30-day "pay balance in full" situation. To top it off, you're trying to do it for a property in PR. This won't be an easy task.