The Ideal Borrower of Hard Money for Real Estate Deals
Carolina Capital is a hard money lender serving the needs of the “Real Estate Investor” and the "Small Builder" borrower who is striving to build wealth and generate income for themselves and their families. We offer “hard money rehab loans” and "Ground up Construction Loans" for investors only in NC, SC, GA, VA and TN (some areas of FL, as well).
As part of our business practices, we also serve as consultants for investors guiding them to network with other investors and educating them in locating and structuring transactions. Rarely, if ever, will you find a hard money lender willing to invest in your success like Carolina Capital Management.
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Hi, we're back. Welcome to the next show. I am Bill Fairman
and Wendy Sweet my lovely, intelligent sister. So what we're going to talk
about in this show is our ideal borrower client. Who is the ideal borrower? My
ideal client is someone who pays us back. I cause a lender that I believe
that's everyone. Okay, well then I'm like everyone else. No, we are unique of
just a little, I don't want to say avatar but, but who is our ideal borrower
client? Who is our ideal borrower? Well you know that's a great question cause
it really depends on what the product is, doesn't it? Whether it's a single
family property or if it's somebody that's doing multifamily or if it's a
commercial borrower that doing apartments or self storage or or that kind of
thing. You know, my favorite person to work with, people who are in our different
mastermind groups that we're members of, they're people that we already know,
like and trust.
and Wendy Sweet my lovely, intelligent sister. So what we're going to talk
about in this show is our ideal borrower client. Who is the ideal borrower? My
ideal client is someone who pays us back. I cause a lender that I believe
that's everyone. Okay, well then I'm like everyone else. No, we are unique of
just a little, I don't want to say avatar but, but who is our ideal borrower
client? Who is our ideal borrower? Well you know that's a great question cause
it really depends on what the product is, doesn't it? Whether it's a single
family property or if it's somebody that's doing multifamily or if it's a
commercial borrower that doing apartments or self storage or or that kind of
thing. You know, my favorite person to work with, people who are in our different
mastermind groups that we're members of, they're people that we already know,
like and trust.
We see the business they've been doing and we know that
they're movers and shakers. We'd know, you know, they're not the kind of person
that if they're running into a problem and they're going to have trouble making
a payment, that we're not going to have to track them down. You know, that's
kind of person that would pick up the phone and call us and let us know, Hey,
here's what's going on. Payment's going to be about a week later, whatever the
the case may be. That's my favorite client to work with for sure in every kind
of a lending situation. You know, when you're dealing in a single family arena,
that's really where you deal with people who are a little bit newer at being
investors and, and newer meaning a little less experience. And you know, that's
where I love the opportunity to be able to have them meet with me on my
Wednesday with Wendy, that you know, the mentorship that we're doing, get them
plugged into their local real estate investor club or just hook them up,
connect them with other investors that have been in the business that, that,
that do similar things that they're interested in doing so they can take them
under their wings and teach them.
they're movers and shakers. We'd know, you know, they're not the kind of person
that if they're running into a problem and they're going to have trouble making
a payment, that we're not going to have to track them down. You know, that's
kind of person that would pick up the phone and call us and let us know, Hey,
here's what's going on. Payment's going to be about a week later, whatever the
the case may be. That's my favorite client to work with for sure in every kind
of a lending situation. You know, when you're dealing in a single family arena,
that's really where you deal with people who are a little bit newer at being
investors and, and newer meaning a little less experience. And you know, that's
where I love the opportunity to be able to have them meet with me on my
Wednesday with Wendy, that you know, the mentorship that we're doing, get them
plugged into their local real estate investor club or just hook them up,
connect them with other investors that have been in the business that, that,
that do similar things that they're interested in doing so they can take them
under their wings and teach them.
So the type of borrower I would say is my favorite would
be somebody who really has a passion for real estate. Yes. But you can be brand
new, not know what you're doing.
be somebody who really has a passion for real estate. Yes. But you can be brand
new, not know what you're doing.
Yeah, so this is the perfect opportunity to get mentoring.
It's not exactly Our ideal client, not that we don't have
faith in you, but we also run a business. That's right. And doing a fix and
flip on a single family residence. There's a lot of moving parts. Yes. Yes. You
as the borrower are taking all the risks. Cause when we lend the money, we're
lending a percentage of the value. Yeah. Not just to throw out numbers. Let's
assume we're doing 70% of the after repair Bay. That leaves us a 30% cushion. If
we ended up having to take this property back because you failed and let me,
let me say this, there is failure in every business there is in real estate,
you're going to lose money. We just don't want it on your first half season. My
point here is there are things that are out of your control and when I say
you're taking all the risk here, when you've decided to rehab or build a home,
it's going to take you between six and 12 months to complete the project and so
many things can happen along the way that markets can change.
faith in you, but we also run a business. That's right. And doing a fix and
flip on a single family residence. There's a lot of moving parts. Yes. Yes. You
as the borrower are taking all the risks. Cause when we lend the money, we're
lending a percentage of the value. Yeah. Not just to throw out numbers. Let's
assume we're doing 70% of the after repair Bay. That leaves us a 30% cushion. If
we ended up having to take this property back because you failed and let me,
let me say this, there is failure in every business there is in real estate,
you're going to lose money. We just don't want it on your first half season. My
point here is there are things that are out of your control and when I say
you're taking all the risk here, when you've decided to rehab or build a home,
it's going to take you between six and 12 months to complete the project and so
many things can happen along the way that markets can change.
The specific neighborhood may change, prices go up.
There's all kinds of stuff that they come out wrong. You don't have x-ray
vision. When you buy a house, you decide you want to take a wall out. You have
no idea what's inside that wall. I had no idea there were that many termites in
there. So the the point is you need to get a little bit of an experience and
with through mentorships and joint venturing with people who have been there
and have done that, we'll make you be a much more prepared borrower for us. But
the people that we like to do business with, for the people that have done
three or four deals already already got bruises and cuts on their elbows. They
listen. Uh, and yeah, they're, they're very trainable. But the benefit of a
hard money lender is that we are the Canary in the coal mine, so to speak.
There's all kinds of stuff that they come out wrong. You don't have x-ray
vision. When you buy a house, you decide you want to take a wall out. You have
no idea what's inside that wall. I had no idea there were that many termites in
there. So the the point is you need to get a little bit of an experience and
with through mentorships and joint venturing with people who have been there
and have done that, we'll make you be a much more prepared borrower for us. But
the people that we like to do business with, for the people that have done
three or four deals already already got bruises and cuts on their elbows. They
listen. Uh, and yeah, they're, they're very trainable. But the benefit of a
hard money lender is that we are the Canary in the coal mine, so to speak.
If we don't want to do your project, it's probably not a
project that you want to do either. Because as lenders, and it's not just us,
it's any lender out there, they're always looking at a project that if I have
to take this back, how quickly can I sell it, get the money back and get it
reinvested because we're in the business too. Yeah. Interest payments in
return, that capital has to constantly be working. It's not our capital. We
have other investors that invest and they expect a return no longer that money
is sitting out there and not being used. But the worse it is on the investors
that put their money into the trial. So we're all again. So we're always
looking at how long does it take us to get rid of it. The longer it's going to
take us to get rid of a property, the more we have to discount the price in
order to sell it quickly.
project that you want to do either. Because as lenders, and it's not just us,
it's any lender out there, they're always looking at a project that if I have
to take this back, how quickly can I sell it, get the money back and get it
reinvested because we're in the business too. Yeah. Interest payments in
return, that capital has to constantly be working. It's not our capital. We
have other investors that invest and they expect a return no longer that money
is sitting out there and not being used. But the worse it is on the investors
that put their money into the trial. So we're all again. So we're always
looking at how long does it take us to get rid of it. The longer it's going to
take us to get rid of a property, the more we have to discount the price in
order to sell it quickly.
Speed is more important than price in almost every case.
Our ideal borrower also is someone who is not just trying to cut corners. Now
we all want to have a deal. We're all looking for deal. Real estate investors
look for deals. I have printed plenty of friends that I've called on the real
estate investor community and ended up stuck calling on the real estate
investor. Continue because we're such cheapskates cause we're always looking
for a deal. So I have to tell a quick story about, a borrower who got
apparently a really good deal on two by four and he didn't call us to do draw
inspections for a little while, which we kind of like if you have the funds to
go ahead and do most of the house before we go out and do an inspection. Cause
every time you go out and doing an inspection it costs you money. So he was
going to save on the inspection fees. Plus he got apparently a really good deal
on Two by fours and decided to floor the entire house with pine, two by fours.
It's doing using actual flooring is going to send off all the prints. So you
had a gap. This one's higher than the normal flooring would be [inaudible] and
they were going to sand anyway. Nope, I had to rip it up. Start all over again.
So how much money did that save them?
Our ideal borrower also is someone who is not just trying to cut corners. Now
we all want to have a deal. We're all looking for deal. Real estate investors
look for deals. I have printed plenty of friends that I've called on the real
estate investor community and ended up stuck calling on the real estate
investor. Continue because we're such cheapskates cause we're always looking
for a deal. So I have to tell a quick story about, a borrower who got
apparently a really good deal on two by four and he didn't call us to do draw
inspections for a little while, which we kind of like if you have the funds to
go ahead and do most of the house before we go out and do an inspection. Cause
every time you go out and doing an inspection it costs you money. So he was
going to save on the inspection fees. Plus he got apparently a really good deal
on Two by fours and decided to floor the entire house with pine, two by fours.
It's doing using actual flooring is going to send off all the prints. So you
had a gap. This one's higher than the normal flooring would be [inaudible] and
they were going to sand anyway. Nope, I had to rip it up. Start all over again.
So how much money did that save them?
Do you have any borrow or stories you can share? Probably
take us, I don't know, hours to think of all the different things I can think
of people who are, I'm just cutting crazy corners and just trying to find new
ways to do things. Okay. I'll give you another quick example and this is where
Wendy comes in and she's able to look at these properties. So it was a bungalow
that was, they added a little extra square footage to it. But when you walked
into the kitchen there was an L shape counter, which is pretty, it's beautiful,
nice and open except the pantry. It was to the back and where the refrigerator
was going to go.
take us, I don't know, hours to think of all the different things I can think
of people who are, I'm just cutting crazy corners and just trying to find new
ways to do things. Okay. I'll give you another quick example and this is where
Wendy comes in and she's able to look at these properties. So it was a bungalow
that was, they added a little extra square footage to it. But when you walked
into the kitchen there was an L shape counter, which is pretty, it's beautiful,
nice and open except the pantry. It was to the back and where the refrigerator
was going to go.
If you open the door it was, let's put it this way, it was
going to hit the countertop. It looked good no matter what were shot, no matter
what side you put the door on it, it was going to hit the countertop. So Wendy
just made a suggestion, move the pantry over to here cause these doors are much
smaller and then move the anyway so you can put the refrigerator where they
are. Well they didn't listen to them so they put the refrigerator in. Sure
enough, it was hitting either side. So you know what their solution was. They
took the refrigerator out and they told people to get their own appliances.
They wanted to sell the house, but people thinking that they wouldn't think
about there being further refrigerated. That's kind of cheating. So the next
thing you learn is take advice from others, especially someone who has been
through at least 500 this year.
going to hit the countertop. It looked good no matter what were shot, no matter
what side you put the door on it, it was going to hit the countertop. So Wendy
just made a suggestion, move the pantry over to here cause these doors are much
smaller and then move the anyway so you can put the refrigerator where they
are. Well they didn't listen to them so they put the refrigerator in. Sure
enough, it was hitting either side. So you know what their solution was. They
took the refrigerator out and they told people to get their own appliances.
They wanted to sell the house, but people thinking that they wouldn't think
about there being further refrigerated. That's kind of cheating. So the next
thing you learn is take advice from others, especially someone who has been
through at least 500 this year.
well at least 500 fixing, um, has, has seen a lot of stuff
and, and understand the design. Wendy is not just a mortgage person, she's a
licensed realtor on Tuesday's [inaudible] don't hold that against me and it's
done. So for [inaudible] 38 years, I was 12. I almost forgot again,
CarolinaHardMoney.com for any new information or any additional information
you'd like on us. Right? That's right. So on our next show we're going to talk
about who are ideal investor client would be. So thanks again. We'll see you on
the next show. Correct? See you soon. So thank you so much for joining us. If
you're really like what you heard, you want to see some more switch over here
or here or perhaps there. There's more episodes, but there's somewhere. Yeah.
By the way, subscribe and like us as well. Please.
and, and understand the design. Wendy is not just a mortgage person, she's a
licensed realtor on Tuesday's [inaudible] don't hold that against me and it's
done. So for [inaudible] 38 years, I was 12. I almost forgot again,
CarolinaHardMoney.com for any new information or any additional information
you'd like on us. Right? That's right. So on our next show we're going to talk
about who are ideal investor client would be. So thanks again. We'll see you on
the next show. Correct? See you soon. So thank you so much for joining us. If
you're really like what you heard, you want to see some more switch over here
or here or perhaps there. There's more episodes, but there's somewhere. Yeah.
By the way, subscribe and like us as well. Please.
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