00;00;07;10 - 00;00;39;18
Unknown
Welcome back to the Seven Finger Flipping Podcast. This is Adam Whitney, and a few weeks ago we shared a call with our lending partner convinced us and you guys really loved getting an inside look at how these lenders work. Today, we're continuing that conversation with another one of our partners, Jessica from American Heritage Lending. Jessica joined us for a call with our members to break down their hard money program and specifically how seven figure flipping members can take advantage of 100% financing options on fix and flip deals.
00;00;39;20 - 00;01;03;10
Unknown
She walked us through everything from qualification process to loan to cost matrices to how they approach rural properties, draw systems and approval requirements. It's a really valuable perspective on how lenders think and how you can build strong relationships with them so that you can build your business. So let's jump right into that call with Jessica from American Heritage Lending.
00;01;03;10 - 00;01;24;18
Unknown
Really want to coach you guys up on hard money and how this works. And then specifically also with seven FX at 775 members, how you get 100% financing because people are like, how is that even possible? How do we do this? How do you qualify, especially if you're new to hard money? We want to just make sure you know the ins and outs of it all.
00;01;24;21 - 00;01;43;01
Unknown
And a lot of it has to do with buying, right? So we'll kind of get to that part and just kind of coach you through it and then answer any questions that you have too. So drop questions in the chat. I'll be watching it. I know sometimes, Jessica, especially if you're looking at the slides, it's so like, see, you don't even see the chat.
00;01;43;08 - 00;02;02;09
Unknown
So I'll be watching that and then I'll just be jumping in asking you about things and then having just been a part of the mastermind for a number of years, I'll just kind of fill in common questions that people might have, and we'll just kind of talk through it. You've been doing a lot of deals with a bunch of our altitude members especially.
00;02;02;11 - 00;02;19;24
Unknown
And, you know, in a lot of, a lot of parts of the country just across, there's some uniqueness, for example, Utah, where I don't know if any hard money lenders who can lend 100%. But you can you can do loans in Utah. A lot of hard money letters can't even do that. So we can talk about that too.
00;02;20;01 - 00;02;41;22
Unknown
For any of you who are there in Utah, still having people coming in. So good. But kind of with that, we, you know, as seven figure flipping as a mastermind, we're always looking for ways to one help you, help make sure you get really good deals at the right price. Like it just there's nothing that substitutes buying, right?
00;02;41;24 - 00;03;06;18
Unknown
Everything starts there. Then with that and the five year framework, it's you know, focus on what you're doing, you're finding and then it's the funding piece of it. And so that's what this series is all about right now. And making sure you can get these deals funded. And then from there it's the execution of it all. So with that, American Heritage is a great partner of ours.
00;03;06;18 - 00;03;36;04
Unknown
Those of you who know I'm from Southern California, South Orange County. Jessica's from the exact same place. We eat at the same places. Love the same food. She's got a great family. And, they're right there in Irvine. So it's just there's all these great connections. We have a bunch of members in California as well. And I think when we were first talking, we were kind of talking about some of our struggles with with hard money, one of which was there's no landing in Utah, which just happened to be a state that no one was land in.
00;03;36;04 - 00;04;00;05
Unknown
And you're like, oh, I do, I can do that. And then we kind of just went through, you know, just different pieces of what people need and funding. And it's it's always good to have relationships with multiple lenders as well. And then from there, we just were talking and we were going through systems, processes, what we do at seven five, how we support our members, just like coaching development.
00;04;00;07 - 00;04;20;06
Unknown
And it was, would you guys do 100%? You know, for us too. And I was like, okay, let's let's vet you a little bit more and let's see who your members are. And now with the relationship, I think we have some great operators that are doing some great deals. You're doing your funding deals for them. I mean, for us, it's really important.
00;04;20;06 - 00;04;51;14
Unknown
I'll just say to all of our members, our partnerships with our hard money lenders are it's a stewardship that we have. It's an incredible benefit that is incredibly valuable. And so we take it very seriously. And what that means is 1 or 2, three bad deals can literally wreck it for everybody. And so, we've got to be getting deals funded, like the right deals need to be funded and then we need to come through.
00;04;51;17 - 00;05;14;08
Unknown
We need to come through on these deals. When markets shift and things happen, like we need to have protections and, backup and security to make sure we come through on these loans. So that these benefits can go towards everybody else. Just guy maybe jumping ahead. And I know you have like a whole presentation are you're fine. I want it to be very like if anyone has questions asked.
00;05;14;08 - 00;05;32;17
Unknown
Like I want it to be conversational and natural and I want you to kind of give, you know, just a little bit of your background to and introduce yourself. But, just seeing the stage a good hard money lender can also help you from doing a bad deal, because it's another set of eyes and they're sitting there going, we're not going to land on a bad deal.
00;05;32;20 - 00;05;54;01
Unknown
Like that would just be bad. So when they come back and they push back on, you don't think of that as like as something negative. Think of that as they're a member of your team saying, wait, let's be careful on this. What about this? What about this? What about this? Like, are we sure? And they're pushing you to be a better operator and a better investor with that.
00;05;54;01 - 00;06;20;25
Unknown
So. Okay, Jessica, I know we're going to go through like the details of price and all that, but let's back up now. Start from the beginning, introduce you American heritage and then take it away. Yeah. So my name is Jessica Reynolds. I've been with American Heritage Lending for about five years now. I did conventional lending before, but, I absolutely love this because it's so fun because every deal is different and it's just an adventure in itself.
00;06;20;27 - 00;06;41;10
Unknown
I'm super stoked to be connected to your guys's group. Like he was saying, I have funded so many deals for seven figure flippers now and have created really strong business relationships, which I think are going to, you know, continue to grow. It's it's really nice when, like, you know, half of your day is just referral calls and hey, my buddy, like, worked with you and he's, you know, like I love that.
00;06;41;10 - 00;07;02;11
Unknown
And it's starting to really come naturally with all my seven figure flippers. But yeah, we've been in business for 25 plus years. So a lot of different companies, they do, you know, numerous types of loans, but we just focus on DSR and our rehab loans. We just added ground up and it's really, really competitive as well. But we have these dialed in.
00;07;02;11 - 00;07;21;06
Unknown
We've been doing them for years, you know, before they I mean, I feel like DSR is kind of getting a little more popular now, but we've had these products dialed in for years now. And super competitive. We're a family owned business. We're all in office, which is amazing. Like, I can walk over and be at my appraisal desks, you know, desk in two minutes in my processor.
00;07;21;06 - 00;07;45;01
Unknown
So it's really a family unit, which makes it really, you know, important and special in itself. So, I mean, when you're appraisal comes in, I'm literally at his desk talking to him face to face. So and we work as a team and I'll go to bat for all of your deals. But like he was saying, of course, if we think something's not going to work, we're going to communicate that because we want we want to work together and have everything be successful for you guys.
00;07;45;03 - 00;08;02;02
Unknown
But yeah, and I have two little girls. A little bit about me. I have two little girls are nine and 11. I'm a sports mom. A lot of clubs, soccer, flag football. So usually on the weekends I'm still available. I can write up commitment letters all day long, but if I don't get back to you right away, I'm probably at some type of sporting event.
00;08;02;04 - 00;08;21;17
Unknown
So yeah, that's a little bit about me. Awesome. Thank you. In the chat, Adam's on as well. And he's like, Jessica, I'm coming with the hard questions. I, I saw that pop up. That's so good. So with that let's just get into it. Do you have are you sharing your screen or is Tracy sharing? Tracy said she's going to take over the, the slides.
00;08;21;17 - 00;08;30;22
Unknown
so I mean, here, obviously we're your partner investor lending. My contact is below. It will also be on the last page. And I'm sure this will be blast to all you guys as well.
00;08;30;22 - 00;08;40;21
Unknown
So, there's my contact so we can go down to the next, page.
00;08;40;23 - 00;09;10;29
Unknown
Perfect. Okay, a little bit. I mean, I kind of already went over this, fix and flips fixed to rent. We do have a really unique product where if you do plan on holding one of your rehabs as a rental loan, we can transition you straight into, a long term loan, meaning it's a one close. So that being said, we would have to it's a little bit different in regards to appraisals because for our normal fix and flip, we're going to do our in-house, you know, closing 12 to 14 business days.
00;09;11;01 - 00;09;28;21
Unknown
This one obviously we're going to make sure that it works as a rental. So we're going to have a full appraisal done upfront to make sure that rental analysis works and that it's going to be successful as a long term hold. But that one, as soon as you're done with the rehab, you call me. We put you into that DSR product and it's super streamlined.
00;09;28;25 - 00;09;49;23
Unknown
So there's not extra closing costs. You already have the appraisal done. So that's if you guys want to hold any of these and build your portfolio. And another thing, for the DSR, we just added about two weeks ago, we can go up to 5 to 10 units. So that's totally new for us. So we are capped it for for a long time.
00;09;49;23 - 00;10;11;10
Unknown
So and the pricing is really, really competitive on that as well. And then as I was saying bridge and then new construction. We also just, I think that I've talked to a few of you guys in regards to construction, and we used to have to have a lot of experience. But now if you're using, GC with experience, we can still do ground up for you.
00;10;11;11 - 00;10;31;29
Unknown
So they kind of, loosen the the guides on that one recently this week actually. Hey, Jessica, we're going to keep jumping around because questions will come in totally with everybody from seven FPS that I've connected with American Edge. I just connect them directly with you in the. Yeah. Jimmy asked. He's like, well, just could be our loan officer.
00;10;32;02 - 00;11;01;24
Unknown
So they go, yeah. So I talked to my boss. So basically they want me to be the main person. If it gets to the point where I need because I have an assistant now as well. But for right now, I am your guys's loan officer. Yeah. And I. Yeah, my assistant's awesome. Like, I even came on all the emails and he puts all the files together, communicates I'm still in the picture, obviously, but he's like, collecting docs and kind of setting everything up perfect.
00;11;01;24 - 00;11;22;28
Unknown
And I know, like, rates are always changing. So anybody who watches this recording, they're always going to have to get current information. But just as you go through the presentation, give us an idea of rates for DSR, DSR when we get to fix and flip. And yeah, because the all the SCR is our floor rate at the moment is 6.25.
00;11;23;00 - 00;11;42;14
Unknown
Obviously that's, you know, a low LTV. Great credit. I would say like with no points, great credit. You're going to be looking at like a 7.125. And then another kind of unique thing is if you're not at the max loan to value, we can finance the points into your loan for you. So it's not coming out of your pocket.
00;11;42;14 - 00;12;00;13
Unknown
So a lot of them, you have to like pay it at closing, but we just roll it into the loan for you. If you're wanting to buy down the the rate perfect. And is there a point in the presentation where we're going to walk through exactly kind of what credit people need? RV kind of talk through all.
00;12;00;13 - 00;12;13;08
Unknown
Yes. I actually have the whole matrix on here, so it might get confusing, but I'm going to I have everything broken down and obviously ask any questions that you know you need to ask me. Awesome, awesome. Keep going. I think we can go to the next slide. Tracy.
00;12;13;16 - 00;12;36;16
Unknown
Okay. This one is just a little bit about us. August units closed. We closed about 402. And as the year, units closed, 3097. August. Just this past, you know, month before we did 141 million and year to date, 950 plus. So we are you know, we're super busy and we're just striving to get better.
00;12;36;16 - 00;12;55;00
Unknown
And you guys, as you know, your company alone has helped us get to those numbers because I have like, you know, borrowers like Angelo and Willie and I mean all their deals are at least a million and they're amazing. So, I mean, thank you guys, because you guys helped us to get to those numbers 100%. All right. We can go to the next one.
00;12;55;00 - 00;13;15;28
Unknown
Tracy. Sorry, keeping you busy over there. Okay, so this is the one thing that I really did want to really go over. And Dave, I know we've kind of talked about this, so for The matrix, depending on your experience we can cover 100% loan to cost. But there is different like barriers when it comes to like the LTV.
00;13;15;28 - 00;13;42;11
Unknown
So you can't go over 70 based on some experience or 75 based on others. But our investors are happy to give the 100% loan to cost. But the as is has to be at our lowest tiers, 85%, and at the higher tiers it can't exceed 90%. And what that means is you have to buy deep so your purchase like so the property has to be worth more than the purchase price.
00;13;42;11 - 00;13;58;17
Unknown
So you're getting it at a deal. So essentially the calculation is the as is plus the rehab divided by the purchase price plus the rehab. So I actually did this and I'm happy to do with anyone I actually brought a whole spreadsheet out and I did a deal with someone so that we can like play with the numbers.
00;13;58;23 - 00;14;24;25
Unknown
It was actually Willie because I want everyone to really understand it and feel confident. So keep in mind, like whenever you have a deal, even if you're not under contract, call me and we'll run all the numbers to make sure everything makes sense. And you understand. You know what? I'm saying? Just good. Thank you. Jim. When we first talked through this, what really stood out to me and just kind of locked in in my mind is you want us as the investor to have some skin in the game, correct?
00;14;24;27 - 00;14;46;07
Unknown
Think about this. When we're buying below market, we're buying off market at those discounts. We're actually bringing equity to this. And so they may cover 100% of the purchase price, 100% of the rehab. It's that equity that is our skin in the game. Is that a fair way to say that? Yes, 100%. That's perfect. Cool. Is there. And does anybody have a question on this?
00;14;46;07 - 00;15;06;21
Unknown
Because sometimes when people are just getting going, they're just starting to gain traction. They're looking to buy. They're so anxious to start a rehab project, they'll find a deal, and they're just really aren't buying at much of a discount at all. They'll apply for 100%. It doesn't quite qualify. And it's like, wait, what? I thought you said American Heritage is 100%.
00;15;06;24 - 00;15;25;26
Unknown
This is one of those factors that needs to be understood. Yeah. So obviously the deal is not dead. We just have to kind of restructure it. So you know like you said you might not you might be at like 98 LTC you know depending on where this comes in and the LTV. All right I think we go to the next one.
00;15;25;28 - 00;15;45;21
Unknown
If anyone doesn't have any more questions okay. So this is the matrix that I was telling you guys about. So this is just made the investors that we work with on Wall Street created this for just you guys. So no one else gets this, these numbers. So if you see kind of what I jump into, like it's figure flipping.
00;15;45;21 - 00;16;02;21
Unknown
But I know, like, you're always calling us, you're like, I've got I've got another seven figure flipper. I know I always say, I know, I'm sorry, I know. And now, and now it's on the documents. Dude. Oh, how funny. That's so funny. But, hey, we'll we'll take the hundred percent. We can fix it later. I know we will.
00;16;02;21 - 00;16;26;12
Unknown
Yes. Seven figure flipping, I know. Okay, so as you can see, zero projects, even if you've done no projects, we're still going to give you a 100% loan to cost. That as is is that you know that 85%. And then the you can't exceed 70% of the after repaired value. You see the non-judicial state versus the judicial state.
00;16;26;12 - 00;16;44;19
Unknown
We did have a site a long time ago, which I'm going to find for Dave, where it's like your site that links to us where it has like all 50 states. You click on it and it tells you if it's judicial versus non-judicial. And I'll make sure we get that so we can send this out in like a blast for you guys.
00;16;44;21 - 00;17;02;14
Unknown
But these are the kind of metrics. So also in regards to rate, we have all different options because we kind of wanted to benefit because there's some people that are in and out, like in 3 or 4 months, some people take the full 12 months. So we kind of give different options in regards to rating points.
00;17;02;16 - 00;17;31;12
Unknown
So for example, like I'll just go to the top, like if you have ten projects and above we have the option of, you know, the ten and a half, 1.8 closing one point exit fee. Or if you prefer to save money at closing, we have, you know, the ten and a half, two and a half points at exit or I have some guys that are obviously out in three months, so they usually go with that 13.5 with no points, especially if the loan amount if you're going to be in and out fast alone, about 2 million, you don't want to pay points.
00;17;31;15 - 00;17;51;23
Unknown
So those are just different options in regards to the rate and points. But I'm sure we have questions. Yeah, okay. We have so one question we have and this has to do maybe we can talk about when a full appraisals are required or not. But Brandon had the question how do you determine as is value on a distressed home.
00;17;51;25 - 00;18;17;03
Unknown
So our appraiser does that. Like we collect the budget in scope and we also collect interior photos from you. So with all of that, he does the value for the houses versus what he feels the value will be based on the budget in scope and all the photos. Or obviously, if you're adding square footage, like we collect all that information and that's where he calculates those, those numbers.
00;18;17;07 - 00;18;44;10
Unknown
So in in house, your guy right there down the hall. He's going to put that together based on the information given. But then also when a loan is over 750 okay. That also does require a full appraisal. Correct? Correct. That requires our full appraisal. And that we always give the appraiser all that information as well. So for an it obviously like with those, I always try to give as much information as possible.
00;18;44;13 - 00;19;05;02
Unknown
Like for example, I know I keep bringing them up, but you know, I had really we added a lot of square footage and it was a huge deal. So I had him write out like a paragraph of like his plan for the whole entire property. I made him just like, give me all this information because I wanted to give him, you know, that information to them so that they knew.
00;19;05;04 - 00;19;22;18
Unknown
And I also just told them, like, I don't know, just, you know, that it's a rehab. All the info, as long as you give as much information, the appraisers are really good on that side. Like I even had one recently. He went down to the fact that he wanted to know what brand they were using for some of their products.
00;19;22;20 - 00;19;35;15
Unknown
So I went back and got all of that to increase the LTV because I actually like, called them. And I was like, hey, you know, I just saw that it kind of came in a little. It was in Utah. And there the comps was all over the place, and he had mentioned that it was really hard for him.
00;19;35;15 - 00;19;53;03
Unknown
So I was like, what was hard? And he's like, well, there's all different types of brands. So then I got back with the borrower. He gave me more information and the appraiser actually bumped it up. So I just feel like the more information given, the more accurate your numbers are going to be perfect. And that now we said this, we kind of hit it really quick of the judicial states and non-judicial states.
00;19;53;03 - 00;20;12;26
Unknown
But one of the questions in here is up to what percentage of the RV. So if you can maybe talk to that 70 versus 75. Yeah. So so say 3 to 5 projects. If you're in a non-judicial state we can't the loan can't exceed 70. Right. Let's go to a different ones. That's the same. So like for ten projects in above.
00;20;12;29 - 00;20;29;19
Unknown
So if it's a non-judicial state our loan cannot exceed 75% of the after repaired value. Whereas in a judicial state which I can like call like new Jersey, New York or judicial states, we would not be able the loan can't exceed 70% of the repaired value. Yeah.
00;20;29;19 - 00;20;46;13
Unknown
Okay, just. I got a question. This one's from Jose. What if we get discounted rate on rehab from our GC on a project? So the statement of work doesn't reflect the actual value. Does that affect RV from appraiser and if so, how can we reflect that?
00;20;46;13 - 00;21;06;16
Unknown
Should we ask for more? Okay, so I'm trying to so are you saying like the rehab you're not asking for all the rehab from us so we don't really see everything that you're doing. Yeah. Or it's it's just less so you know your your here's the purchase price. And then I would say you can come off mute if you want, but maybe it's an $80,000 rehab.
00;21;06;16 - 00;21;26;12
Unknown
But they're only asking for 60. Maybe it. Is that what it was. How does that affect the RV from the appraiser or does it at all? I mean, it would just have to be one of those things where everything is communicated because every communication's key and every part of life, like they need to know everything you're doing to get that RV where we need it to be.
00;21;26;14 - 00;21;46;00
Unknown
You know, you're just putting the few things and that's what they're going to look at. That's what they're going to reflect the RV based on. And I guess part of his question was just from an industry perspective, should ask for more, even though he may not use it or, well, there's always like that contingency that you can add or like for just things that come up.
00;21;46;02 - 00;22;03;01
Unknown
I think that's always a safe thing to do. I mean, we, we require it for I mean, it's not another slide, but we require it for anything 200 K plus for budgets because just for surprises, because, you know, you never know what what you're going to need. So you could always add that contingency if you think you're going to maybe need more guys.
00;22;03;02 - 00;22;26;25
Unknown
So just to be clear on that, if it's, 200 K rehab or you're requiring an overage just for we require a 10% of the budget in a, contingency. Got it. All right. Cool. Jose, if you needed more, come off mute and ask. Here. This one's from Luke. Hey, Jess, you count or do you count or buy and holds rehab projects towards experience?
00;22;26;25 - 00;22;51;06
Unknown
So he already has. He's done some buy and hold rehabs. Already has them. Do those count as experience 100%? Anything that you purchase put rehab into hold as a rental or sell counts as an experience. Love it. Okay, cool. This one's from Jeff. What purchase price does the 100% LTC go up to? A ten projects experience? Purchase price.
00;22;51;06 - 00;23;13;05
Unknown
So our max loan amount is 2 million. Our minimum loan amount is 75,000. I mean, those are our main, you know, guide, but, purchase price, I mean, we're you're gonna get hundred percent of the cost no matter what purchase price. But those are like, you know, minimum and max loan amounts in California, we can't go up to 3 million.
00;23;13;05 - 00;23;35;04
Unknown
No. Oh. You can't. Okay. From that market area. Okay. This is Jimmy. Do you verify all funds to close? Meaning if my brother gave me ten K, would this be okay? Gifts are a little tricky. Sometimes like that, we can do, because it's minimal. But that's just something that has to kind of go through underwriting.
00;23;35;10 - 00;23;53;14
Unknown
But they are a little bit tricky. Got it. What's the best way to handle that? I would if you're planning on it just right up front. Everything. The faster you tell us anything at the best. So then we can just go and get the exception or, I mean, if it's ten K, we might not even need it because they only.
00;23;53;14 - 00;24;16;17
Unknown
So they don't really source on on rehab loans unless it's significant. So just have the conversation with me right away. If you're going to be borrowing money or maybe your your brother's lending to your business anyway. So now your business just has that money sitting in. Exactly. Yep. Okay. And then just when we get to it at the right time, let's talk rural and just do the distinction.
00;24;16;17 - 00;24;34;18
Unknown
I don't know if that fits right here or if it fits a little bit better on other slides, but let's just just answer it for sure. We don't I mean, rural is also tricky. We don't land on a lot. I have funded rural. They're not the biggest fan of them. But I usually go to the president. I go to Dave right away.
00;24;34;18 - 00;24;58;21
Unknown
I just shoot in the address and we kind of look at like the nearest Starbucks, the nearest hospital, the nearest airport, and kind of like get a feel of like the closest city. And if it's like really rural, he will usually be like, sorry, just like we can't do it, but sometimes we can. So that's just another thing that we review right when we get the property and maybe just explain why our investors are just not there.
00;24;58;21 - 00;25;20;01
Unknown
It's just too hard. I don't know the perfect reasoning, honestly. Our investors just do not like to buy rural properties. They're worried about the reselling of them. I think they're just harder to sell for some hundred. It harder to find the right comps to know the right and the comps. Yeah, because we always want at least like 3 to 4 comps within five miles.
00;25;20;01 - 00;25;39;26
Unknown
And obviously if it's rural, that's going to be hard. And then does it obviously you kind of talked about how close it is to an airport city, that kind of stuff. If you have history in an in a rural area, you've already done 20 of them. Does that help? So that is a really good question because I do have a borrower.
00;25;39;29 - 00;25;59;29
Unknown
Because I actually kind of snuck one in because I had worked with them for so long. So and I kind of got but I told my boss I was like, well, he's done like ten loans in this general area and he's, you know, and they kind of made a new rule because of what I did. And they're like, okay, so if a guy has been successful with flips in this area, they will look into that and use that as a compensating factor.
00;26;00;03 - 00;26;21;17
Unknown
So the whole thing is about relationships, information up front. The more information the better. And let's just communicate really well. Like all right let's see. Kelly question for experience rating. Is there a certain number within a certain time frame? I flipped around 50 properties over the last 12 years, but have not done any in the last four years.
00;26;21;20 - 00;26;40;01
Unknown
What is the time frame for counting experience? Yeah, that's a really good question. So it's all of our experience is based on the past three years. Okay. So anything over that we would have to start you off as the, the zero, but yes, everything's in the past three years based on experience. Yeah. Okay. All right.
00;26;40;01 - 00;27;02;28
Unknown
Good. Let's keep let's keep rolling. Okay. All right. Tracy. All right. Okay. So this we kind of went over, the in-house appraiser, appraisals, anything under 750, we do in-house. The full appraisals are only required when it's over 750,000. Or if we're going to do that one time close. So we'll have to get that rental analysis and everything up front.
00;27;03;06 - 00;27;21;04
Unknown
Okay okay. Yeah. We haven't gone over anything to do with draws yet. So, I'm sure many of you guys have worked with other lenders or, you know, even if you haven't, this is really, really nice. It makes it very streamlined. Because we're all on our phones all day, or most of us. So we actually have an app for all the draws.
00;27;21;04 - 00;27;43;29
Unknown
So you're not having to wait on inspectors. As soon as you complete a line item on your budget in scope, you just upload a photo of the completed work request to draw, and then your money is wired to your account within 24 to 48 hours. So as soon as your, loan funds, our company sends out like a little instruction, a link, and all the, you know, how to work the app.
00;27;43;29 - 00;28;06;14
Unknown
And if you ever have any questions, you can always reach out. But, I mean, we make it as easy as physically possible. We don't want you to have to wait on people coming out to inspect your work. Yeah, this this is quick. This is maybe just a good opportunity to to to talk about why Bill is always talking to us about fund 115% of your deals, mixing your hard money with some private money.
00;28;06;14 - 00;28;41;29
Unknown
Maybe that private money is loans to your business. Money that you're lending to yourself, as well. But just making sure you have that cash flow coverage for draws. So a lot of our members are paying their contractors every Friday for. Okay. And so oftentimes if you're inspecting Friday morning or Thursday and work that's complete and done, if you want to pay them right away and then you're submitting through the app, this is fast, but it means that money is probably coming Tuesday right there for you to be able to have that flow to pay your people.
00;28;41;29 - 00;29;10;20
Unknown
Friday, get reimbursed basically Tuesday. That's why we want that additional money raised totally. Okay. Awesome. And you guys anyone have any questions on this? You know, what Rebecca, what is the cost per draw? 100 and $5,050. Okay, cool. And then do you have any advice on just the draw system and how to just be as successful as possible with it?
00;29;10;24 - 00;29;33;07
Unknown
They only say like, obviously like itemize it at the best. You can because sometimes it's a little bit too generic, so itemize it. Like I said, the more information the better. And then we also have where I do the budget in scope, we've created like a place where I can, like I said, write that whole paragraph on like kind of creating a story of what you're planning on doing to the property.
00;29;33;09 - 00;29;48;29
Unknown
It helps out a lot to get us the numbers that we need. Okay. Got it. Cool. This one's from Luke. I got a little bit of paragraph here. Are you able to see that? Jessica? I just read it like. Hold on. I'm trying to find the. Oh, here we go. I haven't even been looking. I'm sorry. Okay.
00;29;49;04 - 00;30;09;01
Unknown
No. That's okay. You're focused. You're seeing the slides. I can read it too. So for a fix and flip loan, at what point do you require final subcontractors or GC bids to be submitted? Our current lender requires all bids and the scope of work to be in place before closing. They also require us to stay between a 10% variance from our scope of work submitted.
00;30;09;04 - 00;30;33;29
Unknown
One of our concern is on larger rehabs as we rush to get statement of work submitted, and don't get to shot pricing with multiple vendors as we worry about missing the closing date. When do you require the final statement of work to be submitted before the close on the property, or before we need to start drawing? So we need we do need the full budget in scope in the beginning because we base the whole loan on that.
00;30;34;02 - 00;30;48;21
Unknown
So if you guys come back and like, you know, once we have that RV as is and all the things, if we switch up the budget in scope, we have to resubmit it to our in-house appraiser and then underwriting us to look at it again. So we do have to have it, you know, dialed in in the beginning.
00;30;48;23 - 00;31;15;18
Unknown
So so what's the best practice for that? And what do you mean by that? Well you don't you don't want to undershoot. Yeah. Okay. Yeah. Well, I mean, I guess what kind of goes along with, like, the whole contingency thing, though, like, if you're not super, you know, but I mean, we don't even require a general contractor unless it's your first deal that you've ever done or if the budget is, you know, at that, I think it's over 150.
00;31;15;21 - 00;31;35;22
Unknown
So if you're not using a general contractor, I mean, I don't know, like usually everyone kind of has an estimate of what their budget and scope is. But I mean, if you do have changes, it just might be a delay, that's all. You know what I mean? Because we will have to go back. I might be a day or two, but sometimes in this world, a day or two, you know, is a big deal.
00;31;35;22 - 00;32;03;12
Unknown
Obviously. So, and then my experience is you need to stay within on your scope, like. What do you mean? So, like, for example, current lender we use has a 10% variance. So if we submitted Hvac as a $20,000 job, if we're over 10% a variance on that, we have to submit a change order on that before we go for the draw.
00;32;03;14 - 00;32;21;23
Unknown
Yeah, for the draw. You do have to create that. Well, if you change it after the fact, yes. Is there a percentage range for that or. I would have to check because I honestly don't deal with that part to be honest, but I will. I have your email and all your contact. I'd be happy to find out and I'll shoot you an email on it.
00;32;21;25 - 00;32;43;25
Unknown
And I'll let Dave now too, so we can let anyone else know. Yeah, we could just kind of quit. What we're doing is we're just kind of listing out bullets, right? Locally. Yeah. All the things you need to know. Yeah. Great question. Luke. All right. This is from Jimmy. Should we use Realtor.com, Zillow, Trulia as platforms for an RV estimator?
00;32;43;27 - 00;33;02;21
Unknown
I don't know, I mean, for RV. I don't think that would work because based on Zillow, I don't think the work has been done yet. So I don't think that would work for. Hey, look, I talking about comps, right? Like just. Yeah, maybe like, as is, you know, I can maybe that, it's sometimes that stuff is so not accurate.
00;33;02;21 - 00;33;22;27
Unknown
That's what's so hard. You know what I mean? My best advice to just get all your information to us, and I mean, we get our numbers back within 24 to 48 hours for my in house, so we can get accurate numbers that we can actually work off of. Perfect. All right. From Tammy, any first time, first timer incentives.
00;33;23;00 - 00;33;44;21
Unknown
And you guys are always trying to just give us the lowest rates possible. Yeah, for these and cover as much as you possibly can is kind of the the big incentive. Yeah. Anything else for first time lender or really have any first time incentives. I mean you'll have a great experience with us and you will definitely come back, but we don't have any first time incentives.
00;33;44;21 - 00;34;10;05
Unknown
But I mean, we have this incentives all around, like, I mean, I, you know, my goal is to just get you guys the best pricing possible and, you know, make the transaction as smooth as I can. Perfect. All right. This is Ethan. Thank you. Jessica. Yeah. You do. All right. We flip. But also our a complete design build GC with engineering team and a cabinet company to self performance of the work.
00;34;10;05 - 00;34;33;28
Unknown
Cause any particular complications. So if you're the GC they're the GC. They're the cab. They have a cabinet company. We see us a lot in altitude especially right where it's like they are the construction company. Yeah. They have the other pieces. Does it cause any particular complications when it's our company that's doing this work? It doesn't. At all.
00;34;33;28 - 00;34;50;01
Unknown
I mean, if you're licensed, if anything, it's actually a good thing because you have, you know, the experience. So I've had a few people that have it and it's caused no issues. Awesome. Yeah. Better easier to quote. Yeah. But I mean, they really, you know, you're you're more experienced. You know exactly what you're doing. So it's actually easier.
00;34;50;03 - 00;35;17;16
Unknown
Love it okay. Cool. All right. You've gone. All right. The next slide please. Okay. So we kind of have asked. So I mean we kind of went over this as well. So I was kind of saying itemize budgets. So you know, make everything as accurate as you can. Just as, you know, strong give as many details as you can faster approvals, because if they have to come back and ask, you know, on certain things underwriter.
00;35;17;17 - 00;35;40;02
Unknown
So I mean, if you're as clear as physically possible, if especially if you're adding square footage, your plans, everything, it's just going to go through our process that much faster. And then contingencies, obviously we were talking about that before. It can be financed as part of the draw schedule. And that's only when your budget is over 200,000 that that has to be, added to the budget.
00;35;40;04 - 00;35;43;26
Unknown
And then I think we go the next one.
00;35;43;28 - 00;36;06;26
Unknown
Okay. This one. So I kind of want to add a little bit more to this. So these are the states that we can't land in. So we can't land in Nevada. The Dakotas Vermont Alaska, Hawaii. But there's a few ones that are tricky with rehab. And Dave, I've kind of talked to you about this. So South Chicago, we're not doing flips.
00;36;06;28 - 00;36;35;24
Unknown
Detroit. I'm trying to see if there's another one. Detroit. And then the five year is in New York. We cannot. Linden. So those. So it's not that we can't land in Chicago at all, but it's just South Side, Chicago. Detroit, and trying to see in Baltimore. So those are the ones that are tricky with our rehabs, that our investors are not allowing us to do business at this moment.
00;36;35;27 - 00;36;53;18
Unknown
Yeah. And it's it's simply risk factors that investors of what they're comfortable with and what they're not. So there's just been a lot of things that the investor came back and they just they won't let us. Yeah. The war zone. Exactly.
00;36;53;20 - 00;37;10;26
Unknown
Except for when the Lions win. And, then it's all, everything's good for a few hours or a few hours. Okay. And then here. So this is kind of more, you know, approvals and as little as 24 to 48 hours because, you know, once we have your numbers, we know if the deal is going to work or not.
00;37;10;28 - 00;37;34;19
Unknown
You know, I mean, that's the main if you're credit, you have the money. But as this RV comes in, you know, we can approve this really fast. Average closes 10 to 14 business days. That starts, you know, the minute I get a full application, all the documents that I need. And then, you know, a lot of my repeat clients, once I have an application from you, I just duplicate it for any future deals.
00;37;34;19 - 00;37;57;21
Unknown
I have folders for all my clients, so I keep your LLC docs, mortgage statement, everything so that you're just literally giving me deal specific. So I make it as easy as possible. So I mean, if you get me everything fast, we'll push these through. You know, like I said, 10 to 14 business days. Of course. Title insurance, sometimes things get backed up, but that's on our end.
00;37;57;21 - 00;38;23;01
Unknown
And then pre-approval. Once I have an application from anybody. If you guys need a commitment letter, I can offer that for you. So when you're putting offers in. So even if anyone on this call doesn't have anything that, you know you're under contract for, that you're ready to move on. Once you find a home, if I have an application, you can just call me, text me, give me the address and the purchase price, and I'm happy to write up a letter for you have within five minutes.
00;38;23;03 - 00;38;48;07
Unknown
Great. And, Jessica, we there's a couple of questions about certain areas. It's always good to have a relationship with you early so that you know you know, don't wait until you have a deal under contract. And it's everything's timing. Connect with you and form the relationship. Kelly, you can ask all the cities that you want, you know, are these approved areas or not, but do all of that now before there's pressure?
00;38;48;09 - 00;39;05;04
Unknown
Yeah. And if you ever have like, I mean, you, you know, always call me. We can go over a property. No problem. Okay. I think we can go to the next slide. I don't think we have too many more, actually. Yeah. And then Jimmy was asking too. I guess it kind of relates to that. Jessica, can I call you to target?
00;39;05;07 - 00;39;29;00
Unknown
Target? Figure out a value for a property? I feel this is important for the first step to making an offer and knowing. Okay, so he's about to start making offers. Ramp up in his area. Can any call you and just start and ask it? Just have a conversation about values? Totally. Yeah. I would rather everyone ask questions like over ask than, you know, be surprised later.
00;39;29;00 - 00;39;51;20
Unknown
Like I want everyone to come to me. Even if you're not 100% sure we can go over everything, I'm happy to do it. And like I said, I would. I mean, if the best was to get an application done so that when you guys are ready to move, I mean, I people that do an application through all their LLC docs in their put their mortgage statement and just have everything sitting, and then they go under contract and they're like halfway there.
00;39;51;22 - 00;40;11;15
Unknown
Perfect. Now I think we I think we may have a link. Do we have a Tracy? I don't know if we have a specific seven F link and we don't have one in the chat now. We'll probably post it with this recording so we can put it in the group for later. Jessica, do you have a certain link or is it just you want people just to direct message you from here?
00;40;11;17 - 00;40;26;05
Unknown
They can totally direct message me. I'm going to get with my, marketing and see what we can do for that. So I think we were talking maybe HubSpot make it so it's like it can all be in one area. Yeah, I'll try to make it as easy as you guys, but there's all my contact above right there.
00;40;26;07 - 00;40;50;13
Unknown
But I'll definitely try to make a link. And I'll get something for everybody for that non-judicial versus judicial. So it's just easy. Perfect. So everybody will with all of these notes, Tracy will post it in the member portal, and then we'll put a unique link there as well to just to make it really easy. And then we like to be able to follow up to, to make sure there are, you know, there's American heritage.
00;40;50;13 - 00;41;08;19
Unknown
Can't share with us any details of your loans or anything about, you know, that kind of stuff. But we just like to follow up to make sure we're good stewards of the benefits that we have and that everybody is being serviced. Well, okay. As a question, Q&A one Q&A yeah. Do you want to ask questions? I'm happy to answer them.
00;41;08;21 - 00;41;34;09
Unknown
Okay. Let's do it. Where else do we hit all of Adam's difficult questions? How do I, if, what is the minimum amount of loan amount? Sorry, what was that? What is the minimum amount of loan I can raise? Minimum loan amount is 75,000. Okay.
00;41;34;12 - 00;42;06;08
Unknown
I'm putting my email in the thread. Okay. You just drop it in there. Yeah. So just Jessica had a question. Yeah. So, the reason why I'm asking you all these things. Because I just moved from Boston to Pennsylvania. Right? And, like, I was doing high volume in Boston and, but, like, I know areas, you know, like, good suburbs, suburban areas, you know, and around the Philadelphia area.
00;42;06;10 - 00;42;50;18
Unknown
And I would see deals come out like there was two that came out, one came out, that one came out at 210,000. And I was researching and asking the realtor for comps. And she came in at like five, 50, 600. So for me, I'm like, you know, like, but at the same time, I don't know if we use a different system for comps, you know, that's why, like, I really want to, like, gear up because I see a lot of deals popping up, you know, with huge, like, equity, like this one down the street where I'm moving to now, it was they listed the house for 320, and the RV came
00;42;50;18 - 00;43;15;15
Unknown
in at $859,000. So I'm sitting here like, okay, this must be a slam dunk deal. So but in order to since, you know, I'm going to American Heritage for the loan, you know, anyone can tell me is worth 850. But if American Heritage says nope, it's only for 50, you know what I'm saying? That makes all the difference in the world, right?
00;43;15;18 - 00;43;38;24
Unknown
So that's that's why like before I put any offers in or, you know, even attempt to say anything, I need to know what is my lender going to, give me as far as a, you know, RV. Right? Because it doesn't matter what the realtor says, it doesn't matter what Realtor.com says. It doesn't matter what you say it is, right?
00;43;39;01 - 00;44;05;08
Unknown
Correct. Yeah. So yeah. So if you know, if I can, you know, call you, because I'm actively looking, you know, for a few deals right now. So, even if I can call you and, you know, just ask you, like, give you an address, right? So that's what I'll do. Yeah, that'd be great, because then that will help me also determined, like how much money I should I put, you know, a $500 vanity or should I put a $100 vanity?
00;44;05;08 - 00;44;23;09
Unknown
You know what I mean? Yeah. So, you know, for me, you know, just by that question alone, by calling you and asking you that it helps me determine the rest of the deal, you know? Yeah. For sure. Yeah. That's all. Yeah, yeah. And honestly, just like you were saying though, like when I said earlier, like, the more information, the better.
00;44;23;10 - 00;44;42;28
Unknown
Yeah. If you want to provide, you know, the comps that you feel, are you can always and I can give those to my appraisal desk, when you're always welcome to give us as much information as, you know, you want to, to build your case and get this. Okay. All right. Yeah. That's great. It's buying season.
00;44;42;29 - 00;45;03;26
Unknown
Jimmy's about to crush a new market. I I'm going to do this part, for me. All right. Thank you. Just. Yeah. You're welcome. Okay. And then this is from, from Jeff who said, he was asking and going back to the new construction, new question specifics such as LTV and rate. You guys mentioned, real quick at the beginning, but if you can just.
00;45;04;01 - 00;45;10;12
Unknown
Yeah, the ground up is really similar. Sorry. I'm going to pull up. It's really similar to
00;45;10;12 - 00;45;20;07
Unknown
All right. So ground up. So that being said, I think this is adjusting. Like I said, for the, people that have no experience, we're going to start working with them.
00;45;20;07 - 00;45;48;19
Unknown
But, there's all different metrics. So like 6 to 9 projects will cover 90% of your full project. But the loan can't exceed 70%. We don't do the 100% loan to cost on ground up. So the, 100% loan to cost is just for the rehab loans. We don't give anyone 100% for the ground up as of right now, I don't think, Jessica, I don't think we've shared the even the 90% yet with our altitude for the new construction.
00;45;48;19 - 00;45;57;20
Unknown
So let's let's do that in. Yeah. Let's get the word out at that next event. Totally. Yeah. For sure.
00;45;57;26 - 00;46;19;20
Unknown
Great. So and Tracy just put in the chat too. We don't have a unique link yet. Beth, just contact Jessica, let her know we're we're part of the seven family remembers. And, then what happens is, is as a request come through American heritage shoots that over to our team to verify that you're a member of the seven community.
00;46;19;20 - 00;46;44;25
Unknown
And then we verify it, and then it goes through. Okay. Let's see, from Sheldon, you mentioned that you just you don't land in the five boroughs of New York, do you? Land in Westchester County? As long as it's not of yours. I don't know where what Westchester County is. Right. But as long as it's not in those five, bureaus in New York, we can land in it.
00;46;44;28 - 00;47;13;12
Unknown
Okay, cool. All right, from Brian, O'Brien in email, you said you need builders risk policy quote. But my agent, who insures all my flips, says that is too robust and doesn't offer replacement cost coverage. She says a vacant renovation policy is much better and offers replacement cost for both the existing structure and new components. So that is something that we require.
00;47;13;13 - 00;47;34;14
Unknown
Or another thing we do need builders risk insurance. So I don't think that I can change that. I can ask about what you're asking, but we we have always, since I've been here, required that builders risk insurance for our rehabs. All right. So yeah. Byron, send the question and then maybe there's some other information too of why they require.
00;47;34;17 - 00;47;43;03
Unknown
And it could be an investor requirement. I mean sometimes it is just that way. But I will definitely look into that. And I'll get back to you because I have your contact already as well.
00;47;43;03 - 00;47;46;12
Unknown
All right. Was this helpful? You guys, this was the.
00;47;46;12 - 00;48;05;04
Unknown
Okay, I see some heads nodding. I hope so. And if you guys have any other questions, please call me, because I'd rather everyone just, you know, have all the information that makes everyone's life easier. For sure. Relationships are so important. That's where we really feel like there's some massive lenders out there. And then there's, great volume.
00;48;05;04 - 00;48;32;18
Unknown
You guys are doing a lot and you're certainly growing, but it also feels very personal, you know, just just getting to know you, your business. The market area that you're in, we just feel that that is just so incredibly valuable. And for newer investors that are really just starting the scale to have somebody in your corner that doesn't want to do a bad deal either and explain to you why they're not comfortable with that risk is also very helpful.
00;48;32;20 - 00;49;00;07
Unknown
Yeah, for sure. Cool. All right. Great. Yeah. We just get some, oh, we oh John. Yes. Thank you. Let's hit that really quick. I will see if there's anything else. Minimum credit. And then just give us kind of the range. Oh. So the minimum credit score is 660. And then hey, let me go back to, I have it on my screen and maybe just got verify that this is correct.
00;49;00;07 - 00;49;22;02
Unknown
What I, what I know is if no projects under 60 to 6, 99, and 60% max RV because it's 65. Yeah. So that drops you down to that 65. So yeah. So there's different if you guys look, I mean, maybe we can go back to that screen really quick if you want, but there's it's like the 660 to 699 range.
00;49;22;02 - 00;49;43;05
Unknown
And then also also the 700 plus. So we'll obviously on that length that we're talking about, we should add this on there as well. So this be a quick, you know, so they can just go to that really quick and see it. And then if if you're up at that higher experience level then then what is the credit score.
00;49;43;08 - 00;50;11;18
Unknown
So even that one we have the range. So like 660 to 699. Honestly, the metrics are actually pretty much the same for that. Yeah. It's your RV, right? Yeah. It's not even that, though. They're pretty generous on that with this two. Yeah. There's not much of a difference with credit. And also if your score is less than 660, don't just not call because I mean if it's like a six I'm not telling everyone just you know, we'll make it.
00;50;11;19 - 00;50;34;16
Unknown
But I mean I have if it's like 650, you know, it's just utilization on your credit. You have experience, you have reserves, you have tons of investment properties. Obviously, like when I put an exception together, I have compensating factors. So they will take that into account. Got it. Okay, cool. Oh my gosh, Luke, I didn't even know you were under contract.
00;50;34;16 - 00;50;54;28
Unknown
That one that you just talked about to make some money. Okay. All right. Good. Yeah. We'll include this too. Jessica. Thank you so much. Yeah. Like, you're already connected with a number of people on the call, I am. Oh, no. And you can handle more. I'm so glad you have an assistant. Yes. So I love it.
00;50;55;00 - 00;51;02;12
Unknown
Yeah. You guys growing? We're going to. So we'll see you in Tampa, right? Yeah, I'll be there. Yeah. I'm excited.
00;51;02;12 - 00;51;20;20
Unknown
All right. I hope you enjoyed that conversation with Jessica. Between this call and the one we shared earlier with content is you should be starting to see the patterns different lenders have their own rules and requirements, but the big takeaway is how important it is to understand their process and to actually build a relationship with the lenders.
00;51;20;22 - 00;51;39;15
Unknown
American Heritage Lending provides these incredible terms exclusively to the seven figure flipping members, and if you want more info on how you can take advantage of the opportunities like this, check out the link in the show notes and learn how you can jump into our community. Thanks for tuning in today. Go back and listen to the content this episode.
00;51;39;15 - 00;51;42;00
Unknown
If you haven't yet, and I'll see you on the next one.
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