Frequently Asked Questions (FAQs)
Have questions? You're not alone. We've compiled the most common questions clients ask so you can get clear, quick answers and feel confident every step of the way.
Private Money
How does your Draw Process work?
Like most Private and Hard Money Lenders we place your rehab funds in an Escrow Account to be received in reimbursements as the said rehab and renovations are completed, inspected and approved.
You (the Client/Investor) will start the project with your money and you have the option to be reimbursed each time you spend more than $15,000 in said rehab and renovations or to continue adding to the amount and requesting a larger amount at a later date.
What is the Draw Process and How Does It Work?
Like most Private and Hard Money Lenders we place your rehab funds in an Escrow Account to be received in reimbursements as the said rehab and renovations are completed, inspected and approved.
You (the Client/Investor) will start the project with your money and you have the option to be reimbursed each time you spend more than $15,000 in said rehab and renovations or to continue adding to the amount and requesting a larger amount at a later date.
Can you help with the BRRRR strategy?
ABSOLUTELY as we are one of a handful of lenders in Texas that directly offers both short-term and a long-term loans, with traditional and non-traditional or Non-QM financing options.
This allows you to receive both loans (short term and long term) with one company and one Loan Officer vs having to send your personal documents to multiple lenders and having multiple repeat conversations about your project.
Loan Process Timelines
What Can I Do to Speed Up the Loan Process?
-Submit all your documents quickly
-Have a statement of real estate owned document ready to go, if not updated, once you acquire each additional property
-Be communicative
-Be responsive
How Fast Can You Close?
As fast as you can provide the necessary documents or complete the necessary steps in our process.
Private Money
How does your Draw Process work?
Like most Private and Hard Money Lenders we place your rehab funds in an Escrow Account to be received in reimbursements as the said rehab and renovations are completed, inspected and approved.
What is the Draw Process and How Does It Work?
Like most Private and Hard Money Lenders we place your rehab funds in an Escrow Account to be received in reimbursements as the said rehab and renovations are completed, inspected and approved.
Can you help with the BRRRR strategy?
ABSOLUTELY as we are one of a handful of lenders in Texas that directly offers both short-term and a long-term loans, with traditional and non-traditional or Non-QM financing options.
This allows you to receive both loans (short term and long term) with one company and one Loan Officer vs having to send your personal documents to multiple lenders and having multiple repeat conversations about your project.
Loan Process Timelines
What Can I Do to Speed Up the Loan Process?
-Submit all your documents quickly
-Have a statement of real estate owned document ready to go, if not updated, once you acquire each additional property
-Be communicative
-Be responsive
How Fast Can You Close?
As fast as you can provide the necessary documents or complete the necessary steps in our process.
Investment Lending 101
What is a DSCR loan?
A debt service coverage ratio (DSCR) loan is one that qualifies borrowers based on the property income (investment property’s cash flow) rather than the borrower’s income.
DSCR loans (also known as invest or cash flow loans) are frequently used by real estate investors to qualify for mortgages and buy investment properties. The debt service coverage ratio (DSCR) is the ratio of an investment’s net operating income to its total debt service. It is a way of determining whether the property generates enough income to support its current debt obligations.
This loan is best used to avoid having to submit income documents and having to be qualified with personal income.
Costs & Expenses Breakdown
What are the costs that I need to expect to pay outside or before closing?
When buying a house there are typically 4 expenses you will pay before closing
-Option Money is typically between $100 – $1,000 and it’s becoming customary for it to be 1% of the Purchase Price
-Earnest Money which is usually 1% of the Purchase Price but can be less or more
-Home Inspections are typically between $450 – $850 and can be as much as a few thousand dollars depending on the scope of inspection and overall size of house.
-Traditional loan appraisals typically range from $500 – $800 for personal and vacation home loans and $650 – $1,200 for investment homes.
Assets & Reserves Information
What are Reserves?
Reserves are the monies you have left over after your down payment and closing costs that can be used as a safety net should you need them. The more you have in reserves, the more your mortgage lender likes you as it shows them you are a safer borrower.
Why are Reserves needed and/or required?
Reserves give confidence to mortgage lenders that payments will continue to be made should an unexpected financial event occur, for example (knock on wood) loss of job, decrease in pay, etc.
Questions on Property Appraisal
Why is an Appraisal needed?
An appraisal is often required to determine the fair market value of a property so that lenders are not lending more than the collateral (subject property) is worth.
Is an appraisal required?
For our Traditional Loans, yes, unless you receive an Appraisal Waiver.
For our Private Money Investor loans, an appraisal is not required nor is there a fee or cost for one.
We instead request our Clients to provide 3 comparables that they personally used to determine the value of the said property.
We then as the lender then do our own internal property evaluation utilizing time of sale information, geographic location and quality of rehab along several other factors to determine our final internal value.
Assets & Reserves Information
What are Reserves?
Reserves are the monies you have left over after your down payment and closing costs that can be used as a safety net should you need them. The more you have in reserves, the more your mortgage lender likes you as it shows them you are a safer borrower.
Why are Reserves needed and/or required?
Reserves give confidence to mortgage lenders that payments will continue to be made should an unexpected financial event occur, for example (knock on wood) loss of job, decrease in pay, etc.
Questions on Property Appraisal
Why is an Appraisal needed?
An appraisal is often required to determine the fair market value of a property so that lenders are not lending more than the collateral (subject property) is worth.
Is an appraisal required?
Yes, we request our Clients to provide 3 comparables that they personally used to determine the value of the said property.
We then as the lender then do our own internal property evaluation utilizing time of sale information, geographic location and quality of rehab along several other factors to determine our final internal value.
Investment Lending 101
What is a DSCR loan?
A debt service coverage ratio (DSCR) loan is one that qualifies borrowers based on the property income (investment property’s cash flow) rather than the borrower’s income.
DSCR loans (also known as invest or cash flow loans) are frequently used by real estate investors to qualify for mortgages and buy investment properties. The debt service coverage ratio (DSCR) is the ratio of an investment’s net operating income to its total debt service. It is a way of determining whether the property generates enough income to support its current debt obligations.
This loan is best used to avoid having to submit income documents and having to be qualified with personal income.
