What is most important when picking a lender?

 

Given the short time frame that our industry operates within, we’ve found reliability to be the most important attribute for our clients.  If a lender changes terms or backs out of a deal it can result in the investor losing the deal.  To avoid this, we stress transparency throughout the funding process.

 

What should I look out for when choosing a lender?

 

Most Hard Money Lenders do not charge high upfront fees.  If a lender is requiring substantial fees for underwriting or some other service prior to funding, it may be a sign that they are not serious about funding your deal.

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Will you supply a Proof of Funds?

 

We are happy to provide our clients and potential clients with a Proof of Funds Letter.  If you require a proof of funds, feel free to contact us. Prior to issuing the POF, we do a quick analysis to make sure that it is a fundable deal.

 

Do you fund first-time investors?

 

Yes.  As long as we are comfortable that the investor can handle the project, we will consider lending to them.  Generally, we don’t like to see a first-time investors rehab amounts exceed $75,000.

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Will you give extensions?

 

If a deal ends up running longer than expected and the borrower needs an extension, we will consider granting 90-day extensions. Granting extensions is typically not an issue as long as there are understandable reasons for why the project has taken longer than expected. We will generally charge an extra point for an extension in addition to continued monthly interest payments.

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What if a lender is not transparent about their rates and fees?

 

Run!

 

Can working with Jasey Capital Group help me to avoid making mistakes?

 

Absolutely!  Our team looks at hundreds of deals a year and we will not fund a deal if we think our client is not going to make money.  

 

Do you require personal guarantees?

 

Yes.  All of the owners of the LLC receiving the loan are required to sign a personal guarantee.

 

Will you fund new construction? 

 

Yes, provided the borrower has experience.

 

What if I have bad credit?

 

We generally like to see that someone on the team has a credit score of 620 or above.  The time when we really need for borrowers to have good credit is when they are planning on holding on to the property as a rental.  If the plan is to refinance our loan with the bank, then we will want to be confident that you have the necessary requirements to get a bank loan.  Generally speaking, there are ways to work with borrowers who don't have strong credit.

 

What's the most common reason for turning deals down?

 

The most common reason that deals are turned down is that they don’t have enough profit for the borrower to make money.  Even if the borrower is comfortable making a small return, that doesn’t mean that we will be.  One of the issues with small profit margins is that they leave little cushion should things go sideways with the deal.  On deals like these, we generally encourage our clients to keep looking and wait until they find a deal with more upside.

 

Do you fund buy and hold deals?

 

Yes!  The main thing that we’ll need to see on a buy and hold is that you have a plan to obtain bank financing.  We are more sensitive to the borrower’s credit and finances for these types of deals as we want to make sure that banks will be interested in funding the deal.

 

Are you accessible to your borrowers?

 

Yes!  We can pretty much always be reached during the day, but we also try to make our team available at night and on the weekends should situations arise.  Real estate is a 24/7 business, so it’s important for us as lenders to be available when needed.

 

Why shouldn't I use a private lender if they're cheaper?

 

When all things are equal, going with the cheapest option makes perfect sense.  When considering a lender, however, the rate is just one of the things that’s important and arguably receives too much attention from borrowers.  Reliability, ability to close fast, transparency, capacity, quality of service, and flexibility are all just as important and often more important than the rate.  For example, if you secure a great rate from a lender but they are unreliable and back out or change terms at the last minute, this may cause you to lose the deal.  Availability of funds is also hugely important.  If a smaller lender is using only their own funds, it is much more likely that they will run out of funding and be unable to fund your project.  Lastly, in selecting any partner, you should always consider what kind of partner they will be if a deal goes sideways.  Having a lender who is willing to work with you and provide advice when the going gets tough is invaluable.