Got the where do I get the money? - Posted by bvmp

Posted by Denise FL on December 11, 2000 at 19:04:15:

Well, I am in S FL and found 2 Mortgage Brokers. I’ve spoken, at length, with both of them, in preparation of finding a deal. Went to contract a couple of days ago, and all of a sudden things are different.

I was originally told 100% financing wouldn’t be a problem. There are many programs, etc, etc. Now I’m told I need either 5 or 10% down. I was originally told buyer’s (my) closing costs are approx. 6% of purchase price; now 1 broker is close to 7.5%, the other was close to 10%!!! I was originally told I could build closing costs and rehab into the loan; now I’m told that I have to come up with closing costs up front and will get it back at closing.

This property is a steal. It’s a duplex appraised value @ $45K, after repairs @ $65K. I’ve got a contract on it for $32K. Needs about $4K in rehab. I’ve got EXELLENT credit, and steady income from work; and the property has tenants for 5 & 6 years @ $800 combined.

What am I missing???
Please advise!

Got the deals…now where do I get the money? - Posted by bvmp

Posted by bvmp on December 09, 2000 at 24:41:09:

Per the mentoring and exchange of info on this site, I took the plunge, spent a weekend and scoured for THE DEAL. What I did not realize is that if you are really willing to work is there are a lot of opportunities out there.

In less than 2 weeks I now have 5 properties under contract.

4 of which are rehab deals. Now where do I find the Hard money lender to come in and provide funding to turn these deals around. I’m thinking about one mortgage for 4 properties. It will look like this:

Proerty 1:
Purchase Price-$50,000
Repairs Needed- $12,000
REAL ARV- $78,000 based on comps

Property 2:
Purchase Price-$22,000
Repairs Needed- $16,000
REAL ARV- $72,000 based on comps

Property 3:
Purchase Price-$48,000
Repairs Needed- $15,000
REAL ARV- $82,000 based on comps

Property 4:
Purchase Price-$26,000
Repairs Needed- $16,000
REAL ARV- $70,000 based on comps

So now here is my question:
My Total Down Payment for all 4 properties - $4,000
Money Needed to fund purchase and rehab - $205,000
REALISTIC Total After Repair Value - $302,000
LTV of Financing needed:67%

Where do I find the money to blanket these properties with one mortgage?

I was thinking:
5 points and 15% interest only plus a 50/50 split on profits with a lender / investor. I propose this because I need someone who can close definitively within 10 - 15 days.

Any Ideas or suggestive help. I sure could use some direction…Thanks ( by the way did I mention that my credit is pretty lousy (low C to D) But I sure can find good deals and put them together!!)

I feel good about this business and if there are hard money lenders out there who truly can turn around a closing quickly and rely on the property value more than credit…I’m your guy.

Help everyone!!

Re: Got the deals…now where do I get the money? - Posted by Ed Garcia

Posted by Ed Garcia on December 09, 2000 at 02:57:01:


You don’t tell us what state you’re in. Hard money is usually private sector. My first suggestion is to find the best broker in town. A brokers job is to find money.

If you are in a suburb of a big city, then pick up the major newspaper of that city.
I’m surprised that you didn’t at least set up a money source when you started to find deals. I don’t understand why you continued to look for deals without a money source.

Once you tell us where you’re at, we might be of some help.

Ed Garcia