Alright.
What's up my friends?
Kris Krohn here with special guest Jerry Norton in the house.
And today, we are talking about how you fund your fix and flip deal.
Dude, fix and flip, it's an interesting game because if you're new at it, it can be crazy
dangerous.
If you know what you're doing, it can be crazy lucrative.
Yeah.
And so much of it actually comes down to how you do the funding.
Because there are loan sharks out there and they will bite your head off.
If you are new to experience, if you don't figure out the right numbers on the deal and
what it's going to cost, it can hurt you.
And friends, that is why I invited Jerry here is because he's an expert in this.
He can show you the right way.
He can also show you how you to get the cheapest invest money, so you don't put yourself in
harms way with high interest rates or anything like that.
Jerry, break it down.
Alright.
The number 1 thing that you need to know about funding a fix and flip deal is there are specialized
lenders out there that do rehab loans.
So, these are loans specifically for somebody to fix and flip the property.
And this is not conventional in any.
This is not going to a bank and say, "Hi, I'd like to get a loan."
Because if you say that, they're going to look at you and be like, "Nope."
I want a big down payment and I want a really good credit, I want to look at your income,
I want to look at everything you've done over the last 5 years.
It's really hard to get that kind of funding.
Well, and that's because they're looking at your credit.
They're looking at lending on your merits.
This other lending is really about lending on the merit of the deal.
They don't care so much about who you are.
They don't care about you really at all.
In fact, they come out better if you default on the loan and they take the property back.
Not the best we want to do.
So, they're looking for, they want to lend on good deals.
That's right.
What is the searchable term here?
What are these people called?
Well, they're called asset lenders, often times called hard money lenders.
It could be term you're familiar with.
Sometimes we call them rehab lenders.
But the point is they specialize in short term fix and flip loans.
And guys, we're going to show you actually how to find these hard money lenders or these
asset lenders.
But first of all, let's kind of talk a little bit about them.
Let's say that you actually found a harm money lender.
What are they looking at?
What are they interested in?
Well, the biggest thing that they look at is equity.
Meaning, is there enough room in the margins of this deal to where, if this person defaults
and I got to take the property back, I can liquidate it, make a whole, I am okay.
So, they need some equity?
And for those of you who are like, "Whoah, whoah, whoah, do not speak chinese to me."
Let's say that this is just an example, right?
Let's say the house is worth $200,000 and let's say that you've got it for $120,000,
okay?
You got it tied for 120, fixed up is worth up 200.
The lender, if they looked at that deal, what would they think about it?
Well, they would say, "Well, you got to put some money into the fix up to get the 200."
But once you're there, let's say it's 25.
Your at 150, total capital.
But it's worth 200.
Hey.
I feel comfortable with that.
If I got to take that property back, I can sell it, get my money back, I'm okay.
And by the way, few more advance, that's called "75% LTV(Loan to value).
Because you basically after repair value as 150,000 and it has a value of 200,000.
So, 150,000 is 75% of the value.
So, lenders says, "Hey, I got a 25% margin of safety, I'm going into that deal."
Yup, and those lenders, they really don't look at your credit, they don't looking at
those stuff.
Which is nice to a lot of people who had bad credit or history or whatever.
Or don't have money.
By the way, you got the deal and the deal is money.
Now, check this out.
This has never happened in the 15 years that I've been doing this whole time.
This type of money, this hard money lending, it's gotten looser and easier to get than
ever before.
They will...
For payments, some of them, right?
Some of them will lend up to 90% of like, all the money that you need.
Which means, you only have that little bit of that difference that you still can get
from somewhere else.
But my point here is, these lenders, they are motivated, they're eager, they want to
put their money out on the streets.
They're in every market, they're in your backyard, if you are listening right now.
But it's still funding, you still got to learn about points and interest.
And there're still payments sometimes.
And there're still the risk of all of that.
So, that's kind of what comes along with the territory of fix and flip.
Now, by the way, at the end, we are going to show you how you can skip the whole...
Some of you be like, "Dude, I am ready to jump in, show me the money.
Where do I find the hard money?"
And some of you are like, "Ugh, I think I like to warm up with something that doesn't
require that..."
We doing the leg rickers come on and saying, "Hey, where's my money?"
One of these days, I'll tell you one of the scariest stories of my life with a hard money
lenders.
Anyway, this is video for different day.
But here's how you find them.
Hard money lenders, Jerry, if they want to just find a hard money lender in their area,
how do they find them?
Well, the big thing that you need to understand is they have to get licensed in order to lend
money to you, right?
So they pull this money up, they have a fund or whatever.
And licensing is state by state.
So if you've heard of a hard money lender that your body told you about or whatever.
The first question you need to ask is "Do you lend in my state?", right?
And the next thing you want to ask is "What are your terms?
What are your rates?
How does it work if I've got a deal and there's a capital needed?
How do you do draws?"
I mean, there's a list of questions that you want to make sure you understand with funding.
But if you just google hard money lenders and you put your state, you'll find the big
ones that're in you state.
So, guys check it out, today, we've talked about how to fund your fix and flip.
Right now, one of the best ways and in today's current market, we're talking about some of
the cheapest money put as a deferred payments.
Potentially going up to 90% of the value.
You got motivated money lenders out there saying, "If you've got a good enough deal,
we'll give you the money."
All you got to do is google hard money lender in you state.
And state by state it's going to break down the criteria of what that looks like.
That's right.
Hey friends, thank you so much for watching today.
Listen, we mentioned that some of you might be like, "Okay Kris, this is going a little
over my head."
Maybe it's a little too much too fast.
Or I'm not ready yet.
You know, so what do you do in the meantime?
There is a much safer way to actually get paid $5,000, $10,000.
Without actually needing the ever enter the any hard money agreement.
And you're going to learn all of that when you actually join the webinar.
I ask Jerry pull a little favor here and see if you put together a web training for you
guys.
And actually show you how do you actually get paid for doing real estate deals without
ever putting your name on a single loan document.
That means, don't need money, don't need credit.
But you can get paid up to $10,000 today just for finding a deal.
And all of that information is available when you actually click the link in the description
below.
Get on that web training and actually have Jerry break it down for you and show you exactly
how it works.