Addressing Joint Venture and equity

In general , 100% financing deals dont work. On the rare deal that does make sense, it becomes a partnership. The lender will always take the approach of " why do a need a partner to finance 100%, i'll just buy the deal". Now it doesnt really happen like that, but thats why its better to partner with clients who already own the property or can put at least 10% into any deal.

equity partners on average will put 10-20% of the required capital in a real estate deal.

100% financing may work with a land owner who has enough equity that a 100% loan to cost on some sort of a development makes sense

Rehab to rental vs straight purchase

investors should consider using a rehab loan to acquire rental property. consider 95 - 100% loan to cost vs 80 - 90% on conventional loans.

after the rehab, simple refinance at 70 - 75% LTV. (you get better terms and may be able to get back your original 5% down payment)

Why: you can do deal after deal vs using your capital up on 1 or 2 deals.

www.texasinvestorloan.com

Hard money for Texas Land

Texas real estate is holding steady compared to most of the US. We like commercial land deals in and around our major metro areas and in path of growth. if you are refinancing , understanding when you purchased and for how much is the first step in evaluating risk and value. Some areas land has depreciated. Also, private lenders would prefer the sponsor keep some equity /cash in the deal.

If you want someone to look at your land, please provide short and concise loan request, detailed location map and explanation of zoning and entitlements.

www.texaslandfunds.com

High risk borrowers for hard money in Texas

Although Texas is lender friendly in regards to foreclosure and interest rates, be careful of clients who are likely to drag you into a bankruptcy. I ask borrowers to consider and sale and leaseback. That way, if there is a problem you simple own the property and avoid most of the legal proceedings. Just a thought.

www.texaslandfunds.com
www.texasrehabloan.com

Hard money myths chapter one

In no real order:

i dont have to provide documentation. (while the property is 75% of the underwriting, we dont want to fight bankruptcy, criminals and other things that tie up our money)

I have an appraisal ( do you believe every movie review without some research?)

as long as i pay high interest rate, i can get a loan:

In Texas property is appreciating ( not everywhere)

I dont have to have money , you are loaning on value (why are you buying at a 50% discount, need good explanation)

There will be more. I would like others to talk about misconceptions and myths, it will help us all with transactions we can close.

www.landstarfunding.com

Establishing value

you have an appraisal, good. Its a MAI (made as instructed...). To help us understand value have some recent comps and listings available. Has the property been for sale , how long? Was it under contact? These are some things that should be in the initial loan request under supporting value data.

www.texaslandfunds.com

Value,Value,Value

Besides location , your ARV (after repaired value is key). Today alone i have seen 3 deals go down the drain due to over optimistic valuations. Learn what makes a good comp. Use comps in same subdivision first. Its a soft market be conservative. Watch out for some Texas suburbs, value is declining and you must take that in account. Here is the good part, many times if dealing with a foreclosue the bank will renogiate. take them your appraisal, they know you have to have a profitable deal. Offer lower price or move on to a better deal. Sometimes (almost always) a busted deal due to appraisal coming in low is a blessing.

why blog about Texas Hard money

Because I am a lender and broker of hard money loans in Texas. Hopefully this blog can be informative and provide some insight into anyone loaning money or looking for private / hard money loans in Texas. Websites can only show so much, this blog will talk about deals and specific examples.

Most hard money requests do not fund. It is my belief that many are deals that would work if either presented / packaged differently. Many times the loan has to be structured a bit differently. From my perspective most failing deals occur because the principles are asking for debt financing when in reality they need a partner.

Also , check our blog because we will be discussing funding Texas, specifically Dallas, Austin, San Antonio and Houston.