All Forum Posts by: David Begley

 This is true Jason - if one is providing a personal guaranty and/or has W-2 income.  However, a Hard Money Lender is by definition an asset lender  - lending on asset  collateral value.  If the RE investor has a W-2 job and/or wants to put their personal assets at risk, then that investor would be better served going to their local bank and borrowing at no points and 1/3 the interest rate.  That is the trade-off.  HMLs can't (or shouldn't) have it both ways - charging near usury rates AND subjecting the borrower to underwriting and documentation requirements mimicking Wells Fargo or BofA.  Their exorbitant fees and interest rates compensate and negate the need for superfluous docs such as Tax Returns. 

 With FIRREA & REFCORP, the division I ran at the time was charged with securing and trying to liquidate several hundred BILLIONS in mortgage collateral during those times, and believe you me, I've seen everything - but nothing a tax return in the loan file would've prevented! lol  When the caca hits the fan, the lender better have security interest and equity in the collateral - nothing else really matters and just serves to make those lenders that really don't understand the asset or business sleep better.  A placebo really.  

Jay, as a 20+ year banker that witnessed both the S&L meltdown in the late 80s/early 90s, as well as the commercial bank failures beginning in the early 2000s, from Ground Zero, I thoroughly understand the need for strict underwriting standards. HOWEVER, we are talking HMLs that charge 4-8 points and 12%-18% interest rates to borrow. They are well compensated for their risk and an individual's tax returns will add nothing to mitigate that risk. You mentioned in an earlier post you lent over 100% LTV - lent on the potential profits. In that case requiring a Tax Return may make you sleep easier at night, but it really isn't mitigating your risk. HMLs by definition are lending on the Asset. Again, if I wanted to go through that kind of documentation and rectal exam, I'd go to BofA or Wells Fargo. Luckily, many HMLs realize and understand their role and underwrite the asset, not replicate FHA/FHMLC/FNMA underwriting guidelines.

@Toyin Dawodu I feel your pain, but I can usually work with an HML wanting skin in the game, if the requirement isn't too onerous. It's the so-called HMLs that have the audacity to request a couple years Tax Returns that send me into orbit. If I wanted to go that route, I'd go to a proctologist - or BofA.

@J Scott   Even as cheap as Labor is in Atlanta, my "shoot from the hip" is more in the $25-$35 range and that's if I'm not moving any walls or dealing with a damp basement. (Of course that is assuming I use licensed contractors and pull permits).  It goes up from there and should only be used to make an offer before getting a better estimate through due diligence. 

@Bruce McCray I would like to know more about the program if you have additional information you can share through email.  I'm specifically interested in the metro Atlanta area.  One question, if I'm buying 200 Atlanta metro leads per month, how can I be assured the leads are unique and not sold to any other, or worse, a dozen other Atlanta investors that have overlapping buy criteria?   Also, in the pre-screening, a minimum amount of equity in the property is necessary.  How does your process weed out those without that equity minimum? 

@Lynn Angus Congrats! And I'll be interested in hearing the more experienced flippers comment.   Without any more information, I would suggest #2.    Is the "tiny bedroom" adjacent to the kitchen so you can knock a wall out and open the kitchen/eating area up?

At that price point I would think a Master Suite & decent kitchen would be attractive to more folks than those wishing for a 4th bedroom.  I suspect most folks in the market for 4+ bedrooms are in the $200K+ price range.  

I presently have two 1950s rehabs listed in Decatur that I wish I'd configured differently.  Both are 3/1.5s with the .5 bathroom in the Master.  Both would probably be under contract before now if I would have converted the 1/2 bath to a full bath inside the Master bedroom, judging from the feedback from those that have already been through the houses - "love the house... wish the bathroom configuration was different...."  Oh well, live and learn!  

Good luck!  I just purchased two West End properties but have not closed yet.  Let's stay in touch and compare notes as we progress.

 Now I'm starting to get curious.... this is the 6th Wholesaler that I've seen offer this property.  Who owns it or has it under contract?  

 Thank you Brian.  I already have a SDIRA and a Solo 401K, I was just curious about using the idle cash within an already funded account.  I will shop around, because these services ("robo-advisor platforms") are new to me. 

 Can one sign up with Betterment with the idle cash in a SDIRA or self-directed 401k?  I started to sign up and they requested my SSN right off the bat which gave me pause.  It does appear an interesting alternative though.