Hello,
I need some help! I need a real lender willing to evaluate my rehab inspite of my credit of 550 and the fact I have a bankrupty on my personal credit report.
I am always finding good investment oppts. The problem is every lender I approach always talk about my personal credit report. What ever happened to equity based investing? I need some help, please. Thank You.
Collateral based lending exists, but these loan programs min. loan amount tend to beyond the scope of the average investor.
Regards,
Scott Miller
I do not foresee your credit holding you back from recieving a loan from a true HML. What is the loan scenario on this rehab?
Jeff Seidler
As an HML myself, the credit score and bk would not be a factor in providing a loan.
As a HML I would only lend to an LLC. There is something called a BK remote LLC that although does not provide complete protection, is an “add on” I would require for you. I would also be sure to get an assignment of rents/revenue so that if you did file bk again, I would at least have a shot (but not a guarentee) of collecting revenue if you filed.
I would also have you find someone else (anyone frankly) to personally guarentee it.
I am curious as to what they are saying to turn you down? I would think that if the equity was in the deal, it may be hard to pass up?
I’m in Detroit area and there are lots of deals here! I just completed a rehab. Purchased for $85 appraised at $135. I would like to find a HML with reasonable numbers so that I don’t have to use my own $. Any out there?
What are your rehab costs?
MOre and more I am finding that hml’s actually do look at credit and very few don take it into consideration. The ones that do usually only off 65% of the current value and not after repair value.
If I understand the regulations correctly, it is actually a violation of federal lending law to lend strictly based on equity or property evaluation without considering the borrower’s ability to pay. There are many rules and limitations imposed on equity lenders looking to do “High Cost Loans”. There are APR (annual percentage rate) limits, for example, which are well below the usury rates and which make hard money lending a less than attractive proposition for those inclined to lend their own money.
Unfortunately, even if lending makes perfect financial sense, you may not be able to secure funds because the limitations imposed by the government so eager to protect YOU.
yeah unfortunately anytimethe government gets invovled wioth anything to “help” it does more harm than good. That is with anything they do
why not listen to what Lou has to say about getting private lenders
http://www.reiclub.com/authors/castillo/042805calldownload.php
(last half of event)
as long as they know you are a successful RE investor why should they care what your personal credit rating is? Their loan is backed by RE ;D
Lots of great FREE stuff on this site. Download em to your iPod and EMERSE your open mind with this stuff. Great way to learn and BRAINSTORM!. Gotta work that mind! Listen to them all and begin networking within yourself as well as with others. 
By listening to them all I’ve synthesized my own creative ideas and workarounds that no one else has thought about ;D
Those who think WAY outside the box are the most succesful in whatever they do. Good luck!
That particular house has already been rehabbed for $10,000. It is now on the market.
I have a new deal. I can purchase the house for $93,000, it has $12,000 in rehab costs. comps about $147,000.
With the purchase price and rehab costs you listed, you would be at 71 ARV, which is slightly higher then allowed by the majority of hard money rehab lenders.
If you can go stated (with a mid FICO of 680) or FULL DOC (with a mid FICO of 640), there is a loan program that allows investors to access to funds up to 80 ARV.
Regards,
Scott Miller
that’s an issue for me. Bills paid on time however, score is 650. I have no desire to go full doc because I have not completed 2005 taxes. However, wouldn’t the property serve as collateral. You have control over property, you’re charging high interest? i have 4 properties now and none have late pays!
Let’s be honest here. Almost no-one is going loan money to someone with horrible credit. Credit is a measure of financial trust. I certainly wouldn’t loan my money to someone who had a history of no paying their debts. Why should I?
If your credit is terrible, you need to fix it. Work 2 or 3 jobs if necessary, but fix your credit. Do whatever it takes. Pay your debts. Then, someone might be willing to loan you money.
Mike
is 650 horrible credit or are u responding to someone else :banghead
Where are you looking to do rehabs at? I lend up to 85% of the ARV and allow you to roll in up 6 months payments on a 12 month interest only.