Clay Sparkman
It is summer at last!
In the Pacific Northwest, that means it is time to play–or for those who are investing in real estate projects, perhaps the reprieve from the rain means that it’s time to get to work on purchase and rehab projects. As much as 80% of the loans that we do are loans to builders, developers, rehabbers, and quick-flip artists. We have creative funding for all types of projects.
As an example: we had a borrower approach us about obtaining the funds to purchase and rehab three little mill houses in a small town east of Salem. The real estate market in this town has fallen flat and so the borrower was able to tie these properties up for the amazing price of $32,500 each (mind you these are small but respectable little houses). Though his credit was rough (due to some bad breaks with the sale of a business venture), he had an excellent plan for rehabbing and marketing these properties to Salem residents looking for bedroom community tranquility. What’s more, the borrower was able to offer some additional collateral in the form of a second against a small commercial building that he owned and leased for a tidy profit.
We were able to loan him 100% of the purchase money, 100% of his rehab money, and 100% of the closing costs. The loan of $145,000 was closed in less than ten days (well before his purchase agreement expired), and the borrower–though paying a 5% commission and 15% interest–was not particularly concerned about these costs, as he was able to get in and out of the loan in just a few months time; and with no prepayment penalty, he turned a handsome profit on this venture.
These are the types of things that private money was made for. When done right, private money is a win-win-win business (with a few extra wins thrown in on most transactions).
As a broker in a tough market, you should not only be looking for these types of transactions, but you should be going out and getting them. Don’t sit and wait for the business to come to you, go get it!
If you need guidance on how to market private money loans to builders, developers, rehabbers, and quick-flip artists–give Fairfield Financial a call. That is what we are about. That is what we do. And we can’t do it without you.
— Clay (clay@privatemoneysource.com, 503-476-2909)
Clay is Vice President of Fairfield Financial, a primary source for private money since 1964. Fairfield is currently targeting loans in OR, WA, AK, CA, CO, ID, FL, GA, ID, MT, NV, NY, OK and TX. To submit a loan to Fairfield for consideration: http://www.privatemoneysource.com/loanproposal.php
Tags: construction loans, hard money borrowing, hard money brokering, hard money lending, hard money loans, private money borrowing, private money brokering, private money lending, private money loans, Quick flip loans, real estate, real estate investing, rehab loans
I have a client looking for financing for a condo project. These are new Luxury penthouse condos that were built in 2007 when the developer let them sit due to an oversaturated market of condos in Florida. The market is coming back strong and is one of the fastest growing since the real estate bubble burst several years ago. The area has a 34% increase in sales for the year to date.
He is buying 5 condos at $2,750,000, that only need to be painted. He needs $150,000 per unit to upgrade each unit to then sell at $1,800,000 for each unit. He has 12 LOI’s already on the 5 units and once acquiring these 5 units will start on the 2nd project of 6 more units and the 3rd project of 4 more units.
Please contact me at 314-965-7875. Thank you,
Curtis Graham
Hi Curtis,
We may be interested in pursuing this, but I need quite a bit more information to be able to provide you feedback as to whether or not we can do it and what our rate and fees would be. My recommendation is that you go to the following link on our website and it will step you through the questions that need to be answered regarding your loan proposal.
http://www.privatemoneysource.com/loanproposal.php
Thanks,
Clay
Clay:
Good article, right up my alley.
A fairly new home in St Helens came up on one the auction sites on Saturday and sold for 110. I couldn’t see much of a profit and didn’t bid. I’ll send you the details just for interest sake. Maybe you can spin it into an article.
Alan