No Hard Money Lenders In My State - Posted by Sierra

Posted by Sierra on May 10, 2004 at 12:55:57:

Thank you all so much for your help. I’m going to consider all my options. Feeling much better now! Thanks!

No Hard Money Lenders In My State - Posted by Sierra

Posted by Sierra on May 09, 2004 at 08:12:36:

I live in Vermont. Like most areas, the New England RE market is very hot right now. My friend just listed her house for sale by owner for a quick sale of $10K below apprasial. She got about 100 calls within 2 days (in VT that’s a lot!) and ended up selling it for $10K above appraisal.

I’ve been able to find good deals, deals I know I could turn around and sell for a quick profit - even without a rehab. What I haven’t been able to find is financing.

My husband and I both work, our combined income is $80K a year. We have $12,000 saved, have no credit card debt, and both cars are paid for. We built our house, it was just appraised for $315K, we have a $200K mortgage on it, we’ve owned it for 2 years. Our credit is good, mine 720, his 760.

We haven’t been able to get a descent loan for an investment though. The hard money lenders say they won’t work in VT. The banks want all kinds of points and closing fees.

I’ve read a lot about RE, but I have not yet been able to talk anyone into owner financing. Sellers tend to talk to other people, find out how hot the market is, and decline my offers.

Any suggetions?

Re: No Hard Money Lenders In My State - Posted by David Krulac

Posted by David Krulac on May 09, 2004 at 15:44:19:

one suggestion would be to take a second on your personal residence. institutional lenders will lend 80% LTV and some more up to and over 100%.

There is some risk here if you don’t have the discipline to manage your debt, as some people don’t. But you sound like you are not that type of person.

Credit unions will often lend no collateral money at reasonable terms to members. Check out a credit union you currently belong to or join one or more. Community credit unions are all the rage now.

sell some thing that you own that is worth some money, but you can part with. Once I sold a truck and used the money as the downpayment on an apartment building, didn’t need any cash out of pocket. Another time I sold a car to pay for building renovations. A friend sold a boat and paid cash for a house with the proceeds, it was a very nice boat. Tools, equipment, furniture, vehicles, jewelry, guns, stamps, coins, bullion, and just about anything that you can think of that has some value can be sold to raise cash, or traded to buy a property. How about a vacant lot, a vacation property, a timeshare, etc. etc. etc.

You might know a HML and not even know it. Its called private lending. Start with people who love you, friends and relatives. Then move on to associates doctors, lawyers, accountants, business people, anybody with money, or anybody with a retirement plan like an IRA, Keogh, etc. could be a source of funding. And I know that there is IRA money in VT.

Re: No Hard Money Lenders In My State - Posted by Neil (MD)

Posted by Neil (MD) on May 09, 2004 at 11:45:17:

I’m a big believer in using a Home Equity Line of Credit (HELOC) You would have no problem arranging one on your home residence for prime or prime +.25. This is a no brainer, easier and cheaper than hard money. You could be set up for a 100K HELOC within 5 days.

Re: No Hard Money Lenders In My State - Posted by Paisley

Posted by Paisley on May 09, 2004 at 09:31:17:


I’ve just had a few rentals, new to the site, so I still consider myself a newbie. However these are my thoughts on your situation.

What about putting an ad in your local paper: RE Invester wants Hard money lenders. I bet there is some private invester that may call and offer to lend you money or possibly offer partnership.

You could pull your equity out using an equity line of credit, pooled with your cash, total $127,000. You’ve got good credit, and good jobs, probably on a time crunch.

Could you find some fixers or vacant homes in or around Vermont for $100,000? What if you Advertised as an all cash buyer with a quick close? Seems to me there has to be someone out there who needs the money NOW despite the hot market. This could be a way to get the property below the appraisal, enough to make 10,000 in a flip. Someone who may not be interested in waiting for 30-45 days to close, may go for that. I would approach them from this angle. Also, remind the sellers they are going to have to pay the 6-7% commission if they list. You are in a position where your money is really going to talk for you. You are willing to sign (of course may the whole deal continguent on the title search and appraisal), and put the money in escrow TODAY!!

Also, I dont know if you do mobiles, but you could probably (First do research and find good parks)go buy a whole bunch wholesale and retail them and make astonomical profits! I know in my area you could Go buy an old mobile for 3000-5000, ask for(half your investment)a 1500-3000 down payment, and owner finance for $7500-10000, with 8% interest on however many months, all day long. Advertise OWNER FINANCING!! LOW DOWN!! My phone would be ringing off the hook. You would have to find out about “dealer status” in your state.

Frankly if My financial situation was where yours is, this is where I would start.

Good investing.