Posted by John Behle on January 22, 1999 at 16:15:57:
Paper is paper. The only difference with Home Improvement Paper can be the fluctuating Loan to Value ratio.
NEVER lend on the “when finished” value. You loan based on the current LTV ratios and then can extend more money as the property improves - like a construction loan.
You can use “multi-staged funding” on home improvement loans or any other loan where you need to temporarily minimize the risk. Staged funding should be contingent. If the improvements are note made, the funds are not extended - no matter what the scheduled time period might have been.
A staged funding scenario requires your monitoring of the situation and an on-going due-diligence. Another, less complicated option can be to just get the borrower to put up different or more collateral (“Collateral Conversion”)
Home Improvement Paper… - Posted by Scott
Posted by Scott on January 19, 1999 at 19:55:55:
I am looking for a mentor in the area of home improvement paper. Has anyone had any experience with this niche?
Re: Home Improvement Paper… - Posted by Mark R in KCMO
Posted by Mark R in KCMO on January 22, 1999 at 18:20:39:
Are you wanting to work with Contractors or are you wanting to work with Rehab Investors??
To me those are totally different markets.
If you are wanting to work with Rehab investors, I think that you find a ready market of investors willing to offer you notes, (I am probabbly one of them) However, I also must tell you that your competition will be the Commercial loan department of the Rehabbers bank, OR a Hard Money Lender. When you find sources that will buy these types of notes, you need to be able to profitablly compete with those rates.
Hope this Helps
Mark R in KCMO