One of their customers bought in 2012 in Charlotte, NC, and borrowed $600,000+ from Bill and Wendy.
He got the house under contract. He did some renos. The buyer backed out. The borrower was stuck with a house. The prices of nearby houses continued to increase in value.
His loan needed to be extended and his loan rate went up 2 points.
In the end, he sold the house by $20,000 more than he expected. So after a lot of stress, he had made a profitable deal.
The fund investors were protected, regardless of what happened.
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.
Hi everyone. Thanks again for joining us on the show today.
My name is Bill Fairman, with Carolina Capital Management. This is my lovely
sister.
My name is Bill Fairman, with Carolina Capital Management. This is my lovely
sister.
Thank you. That is much better.
Wendy Sweet. She is also my partner. So, today, we are
going to talk about the biggest loan we ever did.
going to talk about the biggest loan we ever did.
No, the first big loan.
The first big loan we ever had.
We had a lot more bigger than that.
So one of the things that we do here is we lend money for
people that are doing fix and flips and buying holds and value add.
people that are doing fix and flips and buying holds and value add.
New construction.
Apartment complexes. You can find out more information on
that at www.CarolinaHardMoney.com. When the page pulls up, you can either just
hit the button that says apply now, or if you just have some questions you want
answered, we have an ask an expert tab that you can click on. And it will just
shoot us an email and somebody else will.
that at www.CarolinaHardMoney.com. When the page pulls up, you can either just
hit the button that says apply now, or if you just have some questions you want
answered, we have an ask an expert tab that you can click on. And it will just
shoot us an email and somebody else will.
Try to find an expert to answer for you.
Yeah, we will tell some friends.
We have got a life line or two.
So, we had a customer that went into a neighborhood that
was really, seriously up and coming. You know, we were in the Charlotte market
and this was, you know, 2012 and the market was just starting to boil.
was really, seriously up and coming. You know, we were in the Charlotte market
and this was, you know, 2012 and the market was just starting to boil.
It was just starting to boil.
And we were approached with, I mean it was a huge loan for
us when we started in business, our average loan size, sixty to sixty-five
thousand dollars. And this one was in our portion of the loan was in the
600,000 range.
us when we started in business, our average loan size, sixty to sixty-five
thousand dollars. And this one was in our portion of the loan was in the
600,000 range.
It was scary.
It was pretty scary for us, but it appraised for more than
we thought.
we thought.
And he was a builder. An experienced builder.
And again, the guy was an experienced builder and he was
just moving to a new area.
just moving to a new area.
He had plenty of money in the bank. He had great credit
scores. He was a great, really good risk.
scores. He was a great, really good risk.
So we took the plunge and everything was going, everything
was going swimmingly. You got the house under contract, right?
was going swimmingly. You got the house under contract, right?
He did.
And it was many bedroom. Well, it was not many bedrooms.
He had actually built a library in there and the person that, you know, wanted
to buy the house, had it under contract, took a $10,000 deposit. But that
person wanted to take the library and now turn it into a bedroom. So I had to
do some extra work, put in some walls, you know, add a closet because it is not
a bedroom. Was that a closet, right? And after he completed all the work ready
to sell the house.
He had actually built a library in there and the person that, you know, wanted
to buy the house, had it under contract, took a $10,000 deposit. But that
person wanted to take the library and now turn it into a bedroom. So I had to
do some extra work, put in some walls, you know, add a closet because it is not
a bedroom. Was that a closet, right? And after he completed all the work ready
to sell the house.
She backed out.
She changed her mind.
Yeah, which is a woman's prerogative. That is what we do.
And what was the downside for our borrower?
Well, he was stuck with a house that did not have the
library and now had the bedroom. Oh, that went bad. He had 10 more thousand
dollars leftover, didn't he?
library and now had the bedroom. Oh, that went bad. He had 10 more thousand
dollars leftover, didn't he?
His loan lasted a whole lot longer than he had hoped it
would.
would.
And what was the consequences of that?
Well, in our market at the time, remember it was just
beginning to boil. So the price range of all the houses around were just
increasing, increasing. So that was really okay.
beginning to boil. So the price range of all the houses around were just
increasing, increasing. So that was really okay.
Okay. I get the hint, Wendy.
Okay, we will just say it.
But there is a maturity date on our lives, is there not?
Did we have that?
And that time, I think it was nine months too, wasn't it?
You know, we were not doing twelve months. We were doing
nine months. But his loan was going to have to go into an extension. And when
you go into an extension, you have to pay additional points for the extension
of the 90-day period.
nine months. But his loan was going to have to go into an extension. And when
you go into an extension, you have to pay additional points for the extension
of the 90-day period.
Two more points.
And remember this is a $600,000 house.
So, that was a pretty gash.
Two percent of the 600,000 is what it is costing plus
mortgage payments.
mortgage payments.
Twelve thousand dollars.
To continue this, now.
Now go.
What ended up happening?
I don't remember. So they can set it all the first time
the market was going up.
the market was going up.
So this guy was falling in. He is making mortgage payments
on a house that someone backed out on. He had extra expenses.
on a house that someone backed out on. He had extra expenses.
Made all those changes.
Moving the walls and making the closet.
He was mad at us.
He did get $10,000, but that didn't cover his extension
fee.
fee.
He was mad at us because of the date.
But as it turns out, he ended up getting a contract there
shortly after the price was increased by 20,000 because the market was really
on an up swing at the time. And then, so he ended up making more money and then
selling the house and everything was great. Again, that happens in up markets
and you have to be careful in anything you are doing real estate because
markets change. Could have the same effect and market could have gone down and
now he had been upside down.
shortly after the price was increased by 20,000 because the market was really
on an up swing at the time. And then, so he ended up making more money and then
selling the house and everything was great. Again, that happens in up markets
and you have to be careful in anything you are doing real estate because
markets change. Could have the same effect and market could have gone down and
now he had been upside down.
Right. And it's just as likely that that can happen at
anytime and it's more likely that that is going to happen these days, right?
anytime and it's more likely that that is going to happen these days, right?
But my rose-colored glasses always want to do the success
stories and not this guy is falling in the story. So this worked out great for
him. He still made plenty of money on this thing more than he thought in the
first place. And he came out smelling like a rose.
stories and not this guy is falling in the story. So this worked out great for
him. He still made plenty of money on this thing more than he thought in the
first place. And he came out smelling like a rose.
That is right. But as lenders, we were sitting in a great
position either way. Because we knew we were going to get our renewal thing and
the market is still going up.
position either way. Because we knew we were going to get our renewal thing and
the market is still going up.
Right. And our investors are protected because when we make
a loan we have, typically, a 30% or more cushion between the value of the home
and what we live on.
a loan we have, typically, a 30% or more cushion between the value of the home
and what we live on.
And that 30% was increasing because the values were
increasing. So that was a really good position for us to be in.
increasing. So that was a really good position for us to be in.
So, if you are an experienced builder, or borrower, real
estate investor, we would love to talk to you about seeing if we can help you
on the lending side of things. Now, there is plenty of avenues for lending in
this space where you don't want all your business. We just want to be one of
your tools in your toolbox. We encourage people to look for private lending as
well, but private lenders do not have infinitely deep pockets.
estate investor, we would love to talk to you about seeing if we can help you
on the lending side of things. Now, there is plenty of avenues for lending in
this space where you don't want all your business. We just want to be one of
your tools in your toolbox. We encourage people to look for private lending as
well, but private lenders do not have infinitely deep pockets.
Well, sometimes people use all of those means for the same
deal.
deal.
And then, at the same time, banks or a good way to go. But
banks do not have the speed that companies like ours do. So if you are
interested, again, we said www.CarolinaHardMoney.com. Click on either the apply
now or ask an expert and we will find one for you. You got anything else to
add?
banks do not have the speed that companies like ours do. So if you are
interested, again, we said www.CarolinaHardMoney.com. Click on either the apply
now or ask an expert and we will find one for you. You got anything else to
add?
Can I think of an expert answer? I don't know. I will have
to think on that.
to think on that.
All right, so I was gonna throw this to you. But make sure
you share and like. We have some video archive. Where would that be, Wendy?
you share and like. We have some video archive. Where would that be, Wendy?
It's here or here or here or over there.
Depending on the platform. And what else? Oh,
www.CarolinaHardMoney.com is the web address where you can find us. We're bill
and Wendy Carolina Capital management. Have a lovely day.
www.CarolinaHardMoney.com is the web address where you can find us. We're bill
and Wendy Carolina Capital management. Have a lovely day.
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