Posted by Gerry on December 30, 1998 at 23:27:39:
Kevin:
What LTV are they looking for?
Upfront fees?..if so, be careful.You’re right, seems tooo easy and tooo cheap.
ala McCorkle???
Seems too easy… - Posted by Kevin_Fl
Posted by Kevin_Fl on December 30, 1998 at 22:09:45:
I’m relatively new to RE, and my interest for the moment is flipping. I have recently run into a “Private party” who is willing to lend me 40-250K per prop, at 8%, with 2 points. They also have their own appraisors, lawyers and credit checking services. All of which they will provide me unlimited access with their software and passwords on-line. Essentially, they’re telling me that I will be able to pre-qual my buyer (One that a normal bank may not), write up my own contract and loan app (For my buyer), and send it off to their underwriter for finalization. For all of this, they still seem to be relatively small.
My question is: Has anyone ever heard of any services like these? Should I be wary of anything in particular? I don’t have all of the particulars (Meeting with them shortly), but I’m looking for some educated questions to ask, and perhaps a little background on what to expect. Thanks in advance for any feedback
V/R
Kevin
Re: Seems too easy… - Posted by Rich
Posted by Rich on January 01, 1999 at 20:08:32:
When I was a young lad, my daddy said to me - “Son, there will come a day in your life when a man will approach you with a brand new deck of cards in which the seal had not been broken, and he’s going to offer to bet you that he can make the Jack of Spades jump out of the deck and squirt cider into your ear. But son, do not make this bet, for as sure as you’re standing there, you’re going to end up with an ear full of cider.”
- paraphrased from Sky Masterson in “Guys & Dolls”.
A little food for thought. - Rich
Re: Seems too easy… - Posted by Tim Pannabecker
Posted by Tim Pannabecker on January 01, 1999 at 08:00:05:
Kevin,
The other posts are good suggestions, also ask them about the term of the loan. You will pay less if a loan has a short term. Some hard money have a 6-12 month term, which is good for a rehab flip, but not for a “buy and hold” investor. Some hard money lenders require a fee when you sell. Additionally, their requirements (credit, income, ltv etc.) of your borrower may be quite high. I would ask them what they look for in a borrower. I just had lunch with a friend who found a private investor who provided a non-owner-occupant, 2 point loan, equity based loan, but his interest rate wasn’t 8%. If in fact there are no strings, your source is excellent. You could call the Better Business B., or ask the lender for professional clients such as RE agents that you could talk to.
Best of Luck,
Tim
Sounds very suspicious - be careful - Posted by Andrew Smith (Phila)
Posted by Andrew Smith (Phila) on December 31, 1998 at 17:42:35:
This sounds like it may be too good to be true. If there are any upfront fees - be very cautious. Ask to speak with other customers. Are the loans a given or do you need to pay up front and apply for them. It would be one thing if they charge points when they grant the loan but I’ll bet they charge something up front. Do they charge a fee to set you up with them intitially? This sounds extremely suspicious and could be a scam for first time investors or investor wanabes. Check it out every which way before giving them a nickle.
Re: Seems too easy…Let us know!!! - Posted by Doug Jones
Posted by Doug Jones on December 31, 1998 at 06:12:45:
Hey Kevin,
Are you in Florida? I would like to know more about this myself. Please post your discoveries asap.
Thanks
DJones in Tampa