? About Hard Money Lenders
I'm looking to buy a multi-family property. I just closed on a deal and am strapped for cash. I found a great property. Is there a way to go about getting hard money 100% I can turn the property in less than 2 years and can create enough cash flow to handle my interests and fees from the hard money. Can somebody help :-?
You can get hard or private money to do the deal. However given the current market situations the standard loaned amount will be roughly 70% or less of the value of the property. Also the going rate is between 12-18% interest only payments. And the current average turn around is 6 months to 2 years. Your credit should be at a minimum 650 as well.
Some of them will ask for some points in the beginning, or at the time of payoff. Also make sure that you have the property under contract at the time of the call.
There are currently some lenders that will do the loan in the lenders section located under the "Lenders" link at the top right of this page.
We cannot refer lenders on the forum as it would give an unfair advantage over our advertisers who help keep the site alive and it would muddle the forum with ads rather than info that we all need..
Good Luck,
Kyle
Kyle,
When you say 70% of the value, I assume you mean of the ARV not FMV. Is that correct?
As long as the purchase price, repair costs and the req'd fees/closing costs/points etc are less than 70% of FMV, is Hard Money available for the amount needed to purchase and rehab?
TIA
Look at the owners schedule "E" and see what the actual money in and out was last year. THis will give you definative information.
[addsig]
Thanks for the advice, I am pretty sure this guy is telling the truth. (He is a minister). --I know you could never be to sure so I'll ask him. Thanks again!
You must be comfortable in the are if you are going to be doing any work there (like showing the units, periodic maintenance); As fro the location, everybody has to live somewhere and you might as well get started.
I'm a little concerned about your offering to pay your total possible income as your monthly payment, not even worrying about vacnacies (which you really should) If you need and repairs, incur special assessments (I am assuming the seller payment will include taxes and insurance) you'll be paying out of pocket.
If he wants 950 per month to do the financing, that is certainly OK; but have him agree to a $200 to $250 per month amount being put into a reserve acount with specific draw guidelines - vacancy, repairs, etc. With projected cash flow like you should have, this should be very reaoonable.
regards,
steve
feltmen, please go back and look at my first post. I edited it. It might make better sense. Thanks
Hey,
Personally I stay away from bad areas of town.
The numbers are always very impressive (25% ROI), but I think the numbers are deceiving. You will spend a lot of time chasing tenants for money, filling vacant units, fixing damage, etc. This eats in to your profit very quickily.
FYI: The worst case is NOT 15% ROI, it is a massive negative cash flow.
Bruce is absolutely right. Properties in low income, less desirable areas of town always look great on paper. They're cheap and their rent isn't a whole lot less than for lower middle class neighborhoods. The problem is that you'll end up spending a lot more time trying to get your money. You'll also have a lot more turnover. And then there's also the issue of safety, for both you and your property. Of course not everyone who lives in a bad neighborhood is bad themselves. Plenty of upstanding people live there because of various circumstances and life situations. But you need to ask yourself whether you would be willing to go there at 2 or 3 in the morning if your tenant called and said that they had some sort of problem that required your immediate presence. If the answer to this is no, then you shouldn't be buyin property in that neighborhood.
Good luck.
thanks all, this has been a big help
-Chad
All of my properties are in the worst areas of town, and guess what, if you screen your tenants well and treat them with respect (which they are not used to) it can be quite profitable. My worst deal is 44% return on cash invested, averaging 150-200 cashflow per unit. If you don't buy that deal maybe it's time for me to buy things out of state.
I did just notice this was in the mobile home forum, I haven't done any mobile homes but it still sounds like a good deal.
Alex, no problem is worth getting up at 2am to 3am. If the place burns to the ground what are you going to do that would help it? Nothing. If the plumbing breaks and the palce floods, you have insurance, again, nothing you can do there. Have a voicemail system and answer any late calls the next day.
Ray,
I didn't think Naples had any bad areas ot town. :-D
dheckel,
Maybe Ray only invests in the "bad areas" of Naples. You know, like the houses that were built 12 or more years ago, and are only worth a few hundred thousand. In which case 3 in the morning calls from tenants should be to doctors, not landlords!
Ray,
Honestly, thanks for the interjection, I have been considering a few rough neighborhoods myself and it's good to hear about a landlord who has done well with it.
Luke.... Use the Schedule Eeeeee.... (to the sound of Obi-Wan)
Your never going to hear from a seller that they have great rental history... I called on tons of those "cheap rentals" in Ogden, Utah.. The capital of ghetto and most of the landlords I talked to were in the process of "scaring" there tenants out or evicting them. Sorry but not my cup of tea. http://www.utahrealestate.com/search/?ptype=p_multi&types=63&state=ut&countycode=8&c%5B%5D=-1&proptype=64&lstprice2=1000000&lstprice1=-1&yearblt=&totbed1=0&totbth1=0&totsqf1=0&garagcap1=0&x=76&y=10