Hi there. My name is Vanessa and I’m in Florida. I was a real estate investor from 1999-2007.
In 2006-2007, lots of changes started happening in our market that for various reasons, led me out of investing.
Now I want to get back in, and I’m trying to get a handle on how to prepare.
1.) For instance, back in 2007 I was facing a problem with wholesale flips as the hard money lenders would only pay tiny, if any, assignment fees in the buyer’s closing costs.
I’ve recently read a bit about ‘transactional funding,’ is that the new way to wholesale flip, and not show an assignment fee on the HUD1?
2.) The other problem I have run into is the current state of hard money seems to be ‘all over the place.’
I’ve heard that hard money lenders want credit scores of 650 and ‘skin in the game’. (Back in my day,- lenders didn’t even look at our credit scores, only the equity in the property and any price below the LTV -after closing costs- was given to us in the form of ‘loan proceeds’ which covered our rehab and carrying costs.’
I’ve made some calls to lenders advertising in the newspaper and online and some of them don’t have a credit score criteria, but they don’t lend the rehab money, and their LTV’s are extremely low.
I know how to market (to buy and sell), and I can probably figure out the rehabbers’ criteria for buying with a couple of newspaper and “Handyman Special Quick Cash Close” ads in the local papers, online and from bandit signs, so I can go find houses and negotiate deals that meet that criteria and just bird dog/wholesale flip.
But I would prefer to know how to write my contracts so that my buyers can use hard money without raising any eyebrows when the lender sees an ‘assignment’ fee on the HUD 1, and I’d also like to be somewhat educated on using hard money to fund the deals myself, in the event I want to keep the property or the buyer backs out, etc.
Thanks for any advice. I was pretty successful at real estate for 8 years and I liked what I did. I really want to be back in the game.