Q. If investor loan company is only loaning 65% of the value of a home then how are people covering this with no out of pocket expense? If the home is valued at 100k then the loan is 65k. We can't seem to make those #'s work. How is this done?
A. We have only purchased a few homes at 65% of value. Most of the 140 properties we have purchased have been at 70-76% of After Repair Value and we use private money that we have borrowed from individuals, not formal lenders. Hard money lenders that lend at 65% must loan at those percentages to protect themselves since they lend on the deal, not the borrowers credit.
If you use private money, then you can pay a little more and many times get much better terms on the loan. Start asking around to see who you can find that may want to invest in real estate but they do not have the time or knowledge like you do. They can provide the money and you can do the