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THE UNTAPPED POTENTIAL OF PRIVATE MONEY LENDING WEBINAR Q&AsQ: Going back to the fix and flip what was the LTV again on purchase price + improvement cost? A: We lend up to 90% of cost (both purchase price and repair budget). The LTC (Loan to Cost) is based on the borrower’s experience. We go to 90% with at least 3 verified flips in the last 2 years. For borrowers with 1-2 flips in the last 2 years, we lend up to 85% LTC. Q: Will you finance a portfolio of multiple properties in the outskirts of Detroit?A: Our portfolio rental loan does allow for this, with a minimum 5 properties to be financed and $500K loan amount. Loan amount is calculated by determining max LTV on each property, which must allow for a minimum of $50K per UNIT (i.e. SFR at $50K, 2 Family would require minimum $100K, etc). EXAMPLE: at 80% LTV, a property value of $60K would not be allowed since the max loan amount would be $48K, less than the minimum $50K loan amount required. We lend in all markets in all states where we lend, but we do insure that the immediate area is gentrifying, and the deal makes sense in the market.Q: I have a builder who has a unique model and he needs a construction loan. Will you structure a commercial loan to the builder if he pre-sells to the end buyer with a 25% deposit? The finished product is an attached 4plex community. He'll do about $50M this year in Idaho and Texas. Very strong financials, builder is looking for Prime + 1.5% for the construction loan.A: It appears this builder is looking for a “line of credit” for business purposes which is not something we offer to builders. However, we could offer construction financing one or two builds at a time. Our terms are based on the borrowers’ experience and overall profile, ranging from high 8% to 10%.We do offer “lines of credit” for fix and flip transactions based on borrower experience, credit and liquidity. This is not a “drawable” line, but it’s an amount we “set aside” that the borrower knows is available. The amount of the line is based on the amount of cash in banks. Q: Do we need tax returns for the flip and flip loansA: We do request the most recent 2 years’ tax returns but we do not qualify the borrower based on DTI. Our purpose is to simply verify that the borrower did file for lien protection purposes only. We can accomplish this by either obtaining borrowers’ copies or by sending a 4506T to the IRS for transcripts. Q: Who has to sign as a guarantor?A: The entity structure will determine who needs to be a personal guarantor (PG). Our requirement is at least 51% representation from the entity must be PG. We consider only the profile and experience of the member(s) who sign. We can only consider signing members in establishing terms. EXAMPLE 1: LLC has 2 members, one has 60%, the other has 40% membership. We need only the 60% member.EXAMPLE 2: LLC has 3 members, each 33% membership. 2 of the members will need to PG.PLEASE NOTE: We will always obtain credit and background for a non-signing member if they have 5% membership or more.Q: Paul, if you have a client with over 200 deals as realtor do you take that in consideration or you need deals under his name?A: We can only consider transactions they have participated in as an investor. The flipping process has multiple parts (finding the right property at the right price, estimating the renovation to add maximum value, managing the repair project, and then selling at a profit). So, we can’t count experience unless the borrower was involved in the whole process.Q: What is minimum credit scoreFix and Flip is 600. 30 Year Rental is 640.New Construction is 640Multi-Family is 650Q: How do we prove how many fix and flips the client has done. do we need every HUD statement?A: We do not require HUDs. You will be provided our form which your borrower will complete with information for their flips and any rental properties owned. We verify the history.Q: Can you do loans to foreign nationals?A: We do lend to Foreign Nationals. Generally, the below basics will apply. We may lend at reduced LTC/LTVU.S. experience in the type of projects they’re applying forU.S. Bank Account established prior to closingVerification of 3 credit trade-lines that are active and open for at least 24 months Q: Will you fund a portfolio with a short-term rental/AirBNB included in the portfolio?A: We can fund short-term rentals (Airbnb) with our single asset (one property, one loan) product. Unfortunately, we are unable to do this with our Portfolio product. Q: I saw in the past that you offer credit lines from $100K to $5MM. What are the criteria to get one of those?A: The line of credit, or what we call “preapproval” is underwritten to Fix and Flip guidelines for loan-to-cost and rate, based on experience and credit. The actual amount of the “line” is established based on the borrower’s verified liquidity that can be used to cover down payment and costs. Q: What is your connection to Rainstar Capital?A: There is no direct connection, we are completely separate companies. We did have a joint webinar a year ago or so because Rainstar is a commercial/business finance lender and we are residential/investor lender. The idea of the webinar was to educate both company’s broker partners about additional opportunity in both sectors. This was simply a value-add for our broker partners to help them with other ideas for revenue.Q: Are modular homes acceptable under the new construction program?A: We will finance MODULAR homes, but we will not finance MANUFACTURED OR MOBILE homes. A modular home is just like a site-built home, except it's built in a factory in sections that are assembled on site. The foundation is poured before the home arrives from the factory and utilities are already set up for connection. LendingOne will finance modular homes.??Conversely, a manufactured home is an over-sized “trailer” and can be set on foundations, but they are typically not permanent.??LendingOne will not finance manufactured or mobile homes.?Q: Are rental loans only for 1-4 residential or also multi units 5+?A: Yes, our 30-year rental loan is limited to 1-4 family financing. Our standard Fix and Flip bridge loan allows up to 10 units. Q: New construction Bridge Loan. Can you finance the land as well or only construction?A: We can finance land and construction up to 85% of both, based on borrower’s experience and profile. If the borrower already owns the land free and clear, we can credit a percentage of the purchase price of the lot toward the construction to minimize borrower’s cash to close.Q: On the 30year rental will you consider Airbnb, FSBO etc.?A: We will consider both. Please note that we want to see that the subject property is in a market where long term (standard family rentals with longer term lease) rental properties are common. Seasonal Rentals (Beach, Ski or Mountain Houses, Vacation) in markets where properties are predominantly rented only for a partial period in the year are not acceptable unless there is also a strong long-term rental market in the area as well. Q: I reside in Florida - Am I required to have a real estate license to broker these deals?A: Because we lend only to entities, and only on non-owner-occupied properties, we do not require proof of licensing. Q: Do you offer blanket mortgages on rental program in NY StateA: Yes, our Portfolio product allows this. We require a minimum of 5 properties and minimum $500K loan amount. We offer all of our products in all states where we currently lend (all states except ND, SD, VT, Alaska). We also do not currently lend in UT or NV, but we are in process of licensing in these two states. Q: Will fund an investor with past BK or foreclosure?A: Yes. Generally, we require a 3-year seasoning for these events. We may consider shorter seasoning if the event was the result of an isolated occurrence and was caused by a verifiable, unavoidable life event (loss of job, loss of spouse, divorce, etc.). There cannot be any derogatory credit since the occurrence. Q: Do you do hard or soft credit pulls on clients or is the client responsible for providing the credit report?A: We pull our own credit. However, we normally wait to pull the report until we know the deal is qualified and we are ready to submit to UW for the term sheet. Brokers are welcome to pull credit, but we do have to pull as well. Q: Will you take only one credit score?A: We are not able to work with only one score. We can work with 2 scores and use the lower score. If there are 3 scores, we use the middle score. Q: Do you take Credit Check Total for the credit report?A: We pull our own credit report per previous question above. Q: Do you fund in assisted living properties?A: We do not lend on properties that are used for commercial purpose, so ALFs are not allowed. Q: Are you licensed in FL?A: We lend in Florida. In fact, our corporate office is based in Boca Raton, Florida. We lend in all states except ND, SD, VT and Alaska. We also do not yet lend in UT or NV, but we are in process of licensing in these two states. Other than the states mentioned above, we currently can lend anywhere. ................
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