All Forum Posts by: Tyler L.

@Jeff Barnard congrats Jeff! 3 units now...then 30...then 300

My partner and I are looking at foreclosures in New England in the $250k-$350k range to rehab and flip. We’ve looked at hundreds of listings to familiarize ourselves and have found about half a dozen gems (light rehabs that would be an all in of 60-70% ARV). I’m aware that most lender in the 90-100% range are less-than-legitimate. The problem is, we’re college students who alternate between working and attending school. We have good credit (by any standard) and a decent bank account (by college standards) but not enough to put down the standard 15-25% most HML and private lenders prefer. Our terms would have to be on the strength of the deal and our putting in what we have. Are there any HML or private lenders in New England that are willing to fund a very high LTV for the right deal? Conversely, what kind of terms would persuade a private lender to put up the 15-25% in exchange for second lien?

As we all know, interest rates have been historically low. Eventually (although likely several years away) interest rates wil creep back up into the 7-10% range of the late 90’s, and, God forbid, the 12-18% range of the early 80’s. What’s everyones plan in this case? My thought is that rent will go up and prices will go down to compensate, but I wonder how much. This seems to put a damp on people who would be acquiring properties at the time, either straight buys or BRRR’s. Who was investing in the 80’s and 90’s with these rates? How did you compensate?

My partner and I have located a few properties we’re interested in flipping. We’re both in college, and while we both have respectable jobs (by college standards) and strong credit, we’re aware that it’ll be very difficult to find hard money loans in our position. Parental co-signing is possible but not probable. Has anyone been in a similar position? Taking in HML while still young enough to not have a proven history? What factors convinced them to agree to the loan? Conversely, for HML and private lenders out there, what factors would cause you to agree to a HML to college students? Would a fantastic deal be enough for you to overlook your lending standard?

@Jason D. this would be continent upon financing. The plan is to use a HML unless our private lenders offer a better rate.

We’re on the lookout for our first deal, so the specifics of the process is new to us. Do we simply say “contingent upon financing” in our offer and submit the pof from the lender? I just fear we won’t get through the door of many sellers, especially if we try to buy a foreclosure from a bank.

My partner and I are looking at both potential flips and BRRRR’s. We have private lenders who would be willing to lend “for the right deal” but none who are willing to approve the deal until our offer has been accepted. If none of our lenders approve a deal we make, we’ll go the traditional hard money route. Because of that, I see no ethical problem with giving proof of funds from a HML (they will be our option unless we get a better rate) but am not sure if it will be enough when submitting an offer. Is proof of funds from a HML enough to have our offer entertained?

In smaller markets, or deals with a unique home layout, it can be hard to find comparable sales to value the home on. What’s the best way to value a deal without comps?

@Nick Mess I just sent you a request and would love to talk to you soon. Congrats on your first project and Go Huskies!

@Blake Denman there were a few reasons.

We’re based out of Boston, so New England as a whole made sense to us. We wanted to stay within 90 minutes of our location to keep a vigilant eye on the properties. We decided against Boston itself for a few reasons, including: prohibitively expensive, very competitive market, and difficult permitting process. All told, it’s too many moving parts for first time flippers.

The three cities we chose fit a set of criteria we listed: reasonably affordable median home price, medium-sized market, large percentage of suburban houses, and attractive area for families. 

I’ve seen more opportunities in New Hampshire so far, so I dedicated most of my research there, but Providence or any other market I get in to I will know by heart before an investment is made.

Of course, as a rehabber the job is to find the worst house on the best block. As we’ve explored these areas, we’ve found they have quite a good supply of exactly what we’re looking for. 

@Christina J. Thank you so much for the information and encouragement!