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Wildcat Lending Helps Investors Roar Toward Their Goals With Fast & Easy Funding

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The house flipping market seems to be moving faster than ever. Opportunities are plentiful. Though success in getting started or dominating your market is still all about having the funding on tap. Don’t let those deals get away like a herd of gazelles. Let Wildcat Lending put a spring in your step and fund more deals, faster than the competition.

House Flipping Rates Leap in 2019

According to the latest statistics from ATTOM Data, the US home flipping rate has reached a new high in 2019.

The total dollar volume of homes flipped using financing hit a new 12 year high in Q1 2019, at $6.4B. Over 49k homes were flipped in the first three months of the year, for an average gross profit of $60,000 each. Flipping has been growing by double digits in many markets, with several Texas cities growing 41% to 55% year over year. House flippers have been making over 100% returns in at least five markets.

Roar into Action & Speed Up Your Game with the Lender That Makes Hard Money Easy

In order to stand out on the landscape and win more contracts, to get started or to scale to crush your new goals, it’s still all about the capital. The deals are there, the buyers are there, new technology is making the operational side easier than ever. It’s just about having the money to buy and rehab, and to fund them faster and more efficiently than everyone else.

This is where Wildcat Lending comes in.

Wildcat Lending is on a mission to make hard money and rehab loans extremely efficient, simple and effective for investors. They offer lighting fast funding, aggressive terms, and could help fund your next deal.

They can finance your flips, wholesale deals and even rentals.

What’s New with Wildcat

We tracked down Wildcat’s Chief Lending Officer Kevin Shipman to find out the latest on this lender.

Kevin says the lender’s recent expansion from Texas to Tennessee has been a huge hit, with new deals being funded there every week.

Kevin and his team’s outlook for the market remains very bullish, especially for properties at $300k and below. They see plenty of buyers for deals, and great performance on the loans they’ve been making.

What you might not know about Wildcat is that in addition to financing up to 90% of your house flipping projects, they do rental property loans, and they’ll finance 1-4 unit properties, including condos.

While many of their investors are experienced, Kevin says, “we love working with newbies.” It’s always exciting to help someone new get into the game and off the ground. So, if you’ve had trouble meeting the experience requirements at other lenders, consider trying these guys out.

Improving the lending experience and helping investors is something Kevin has been passionate about since school. He always liked numbers and was good at math. After getting his finance degree he started working at Wells Fargo and quickly moved up to management before striking out at the Senior Vice President of a community bank. Then being driven to create even more efficiency and better service for investors, he joined Wildcat.

When we say Wildcat is fast, we mean really fast, and it is one of the advantages that is helping them scoop up more market share. Kevin says they can close deals in as little as 24 to 48 hours. In fact, when another lender recently turned down a house flipper’s loan in the middle of a deal, Kevin’s team stepped in and got the file from start to closing in a ridiculously fast four and a half hours.

You’ll find lots of convenient features at WildcatLending.com, including:

● Online applications
● The ability to text a loan officer
● Rehab worksheets
● Draw request forms
● Online payoff requests

They’ve also teamed up with investor friendly title company Strike Title. A title insurance provider who gets investor needs, assignments, double closes, and a sense of urgency.

The Investment Property Loans You Want

Fix & Flip Loans

● Up to 90% Loan to Cost(LTC) or 70% of ARV the lessor of the two
● 6 month term with 90 day extension option
● Lender ordered ARV appraisal
● $50k+ loan amounts
● 1-4 unit homes

Rental Property Loans

● Up to 80% LTV for purchases
● Up to 75% Cash out Loans
● 24-36 month terms
● Rates as low as 8.99%

These loans are ideal for those taking on new income properties which may need some improvement and releasing before investors can season them for more attractive loan term financing. As well as for those who just don’t want to deal with the hassles of out of touch banks.

The Wildcat Lending Difference

● Wildcat currently charges just 2-3 points for hard money loans
● Funding for brand new and experienced property investors
● Same day loan approvals
● No income verification
● Modest credit scores accepted
● Everyone you speak to is a decision maker and able to make a common sense loan decisions

Summary

There is a relentless amount of real estate investment opportunities for income property investors, wholesalers and house flippers. The profit potential is incredible. If funding has been holding you back from your goals, get a hold of Wildcat and see what they can do for you.

Head over to WildcatLending.com where you can submit deals online and use their rehab budget worksheet to nail those numbers, or just pick up the phone and run your deal by Kevin now at 817.832.3451.

Kevin M. Shipman | Wildcat Lending, LLC. Chief Lending Officer

Interview With Bruce Norris of The Norris Group, Riverside, California

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By Christina Suter, FIBI Pasadena

I recently spoke with my industry colleague and good friend Bruce Norris about what it took for him to break through from who he was as a young man to the guru he is today. Bruce is an active investor, hard money lender, and real estate educator with over 30 years of experience. He is the founder of The Norris Group and has been involved in more than 2,000 real estate transactions as a buyer, seller, builder, and money partner. Bruce has dedicated himself to understanding the economic field in Southern California, and it shows in his work.

Photograph of Bruce Norris, courtesy of Christina Suter.

Bruce was married at 17, fired five times in a row, and eventually got the hang of getting a job. After reading How To Win Friends and Influence People, Bruce said he learned about avoiding the acute angle, which is finding a way to find an argument in everything. The book taught him to diffuse it and to enjoy the skill of learning to diffuse it.

Bruce then got a job in sales, where he sold electrical supplies for six years. One day he was invited to join a man to watch his attempt to buy a house wholesale. After the house was purchased, Bruce realized his life experiences could translate into the real estate buying business. In his electrical business, Bruce sold supplies to people who already had suppliers. In real estate, he convinced people to sell their house to him because he had cash and people could close in a few days.

One of the skills Bruce has mastered is the power to close a deal. When he negotiates with a seller, he lets them know that based on his experience, things work or they don’t, so his offer leaves with him. Bruce tells sellers if they call him back the next day, he will let them know that he’s no longer interested because he wants the power to close and know he’s telling them the truth.

Bruce has earned a reputation in the industry based on his integrity. He will often spend the first 15 minutes speaking with an owner just suggesting things for them that have nothing to do with him making a profit. Bruce will ask about their situation and make recommendations that don’t always lead to him, as a cash buyer, closing the deal.

Someone once referred a couple to go talk to him. He visited the couple for two hours. During that meeting, the husband made it clear to Bruce that he desperately wanted to move to another state, Tennessee, where he had a job waiting for him and his wife. The husband wanted such a full price without commission that he basically got in his own way, Bruce remembered.

There was an underlying desperateness to the man’s situation, so Bruce told him he could sell his house to him that night if he was willing to take less for his house. Bruce closed on their house.

Ten years later, that couple’s 21-year-old son visited his office and informed Bruce that he had been causing trouble in their house, due to his gang involvement. He told Bruce that had if he not bought their house, they wouldn’t have been able to move — and that kid would have ended up dead. He asked Bruce to teach him what he knew and how he was able to purchase his childhood home. That kid went on to open an office on Magnolia and Riverside and bought houses.

The first foreclosure Bruce ever door-knocked was an elderly woman who had $13,000 of debt on a $64,000 house. Because he didn’t want to make the woman homeless, Bruce was able to get the lender to arrange a loan for her — largely thanks to the equity she had in the house. Therefore, she was able to keep her house.

Bruce said he wants both sides of that when he’s a buyer. He wants to be able to look across the table and if he can help the seller make the decision he’d make if he were in their situation, he also wants to be kind enough to let them know when they’re making a mistake.

I asked Bruce how he switched from real estate as a job to having freedom and creating financial stability.

“It really wasn’t a priority to me, so I kept very little inventory for rentals for the first 15 year plus years; I just flipped,” he said.

Bruce added that Jack Fullerton was influential in saying, “That’s great, but what happens if you get hurt or sick? How are you going to have income coming in?”

Bruce said he took that question to heart. While on vacation in Maui, he listened to Robert Kiyosaki’s Rich Dad, Poor Dad. Thus, he learned Kiyosaki’s four ways to make income quadrant.

Bruce said he was always working for someone else or self-employed (the left side of the quadrant) — but on the right side of the quadrant, he was attracted to the two that involved running a business that didn’t need him and collecting checks from investments.

From that vacation on, Bruce changed the way he made income. He said he’s not self-employed because when he goes on vacation, his business can run without him. Thus, he runs a company. Bruce’s loan business, education business, and rentals all started to run without him, and he said he’s probably the least needed person at The Norris Group.

According to Bruce, it took him until late 2005 for his rental income to allow him to feel financially free. He had to think long term and at age 33, a $30,000 profit from a flip was more appealing to him than a cash flow of $200. Bruce said it took him a while to want to be methodical with the rental income and to actually fulfill that vision.

Bruce and The Norris Group can be reached at www.thenorrisgroup.com

Christina Suter

As the founder and lead consultant of Ground Level Consulting, Christina L. Suter brings two decades of real-world experience as a serial small business owner and real estate investor. She developed her extensive financial and operational skills firsthand as she faced and overcame each difficulty that appeared along the way. As a result, she started up, managed and sold several businesses successfully, while developing an extensive real estate portfolio.

In 2002, Christina made the decision to leverage her experience into helping other small business owners and property owners through a consulting practice that works the way an entrepreneur works, dealing with the pressing problems of a business on the ground level and in real time. Since then, she has supported numerous companies throughout southern California and the western United States move beyond surviving to thriving.

Christina’s solid background and education–including a Bachelors in Business, an Associates in Teaching and a Masters in Psychology–strongly influence her work with your company as a Ground Level client. Not only does she have a keen insight into what will make or break the success of your business, but she can teach you the skills you need going forward. And she does this in a warm, supportive, non-judgmental way that is always highly respectful of your personal values.

Breaking: Demystifing CARES Act and Other COVID-19 Resources for Investors

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By Stephanie Mojica

The $2.2 trillion CARES Act is the largest economic relief program in the history of the United States and has two primary programs to offer — the Paycheck Protection Plan (PPP) and the Economic Injury Disaster Loan (EIDL).

These programs, offered through the Small Business Administration (SBA), provide unprecedented economic relief for entrepreneurs, according to Rony Marootian. He is the Marketing Operations Manager for the Los Angeles-based tax preparation and financial consulting firm Robert Hall & Associates.

PPP loans are based on the average monthly payroll expenses of a business, multiplied by 2.5 and capped at $10 million, according to Marootian. They are intended to cover expenses for a business during any eight-week period between February 15, 2020 and June 30, 2020. PPP funds can be used for payroll costs, rents, mortgage interest, and utilities. If a business owner maintains a certain level of payroll expenses and employee numbers during that eight-week period, the loan is 100% forgiven; as employee numbers fall below those levels, the forgivable amount is phased out.

While business owners can get both the PPP and the EIDL, both loans cannot be used for the same purpose, Marootian said in a recent email interview with Realty411.

According to the U.S. Chamber of Commerce, “if you are able to secure a PPP loan, the $10,000 grant will be subtracted from the forgiveness amount.”

EIDLs (also known as emergency advance grants) are to be distributed within three days of a business’ application; however, the PPP program does not have deadlines for lenders to disburse loans, Marootian said.

“However, the purpose of these new programs is to get funds to small businesses struggling to stay open and keep employees paid due to COVID-19, so the CARES Act has provisions to reduce burdens in the processes and increase efficiency,” he added.

SBA PPP loans are disbursed by SBA-approved lenders. Due to the circumstances of the COVID-19 crisis, the SBA has given the U.S. Department of the Treasury and the SBA the ability to grant temporary SBA-lender status to lenders that do not currently participate in the program; this will allow more loans to be approved and disbursed as quickly as possible. The SBA does not issue PPP loans, but instead guarantees them to the lender. However, the SBA directly administers EIDLs.

“Based on our experience, we’ve not seen the government provide such a rapid response to help small businesses,” Marootian said.

“The purpose of these new programs is to keep small businesses afloat and get funds to small businesses who are struggling to continue to pay employees, so it was imperative that they responded quickly.”

According to the CARES Act, a small business is any business that operates with 500 or fewer employees. In some industries, the size may be expanded by the SBA. Self-employed professionals, independent contractors, and sole proprietors also qualify, according to Marootian.

“The SBA does not currently have an industry size standard for employee numbers for real estate brokerages, property managers, appraisers, or other activities related to real estate,” Marootian said.

Sole proprietors and “gig economy” workers will have to provide documentation to prove eligibility, including payroll tax filings to the IRS, Forms 1099-MISC, and income and expenses from the sole proprietorship, according to Marootian.

Marootian emphasized the importance of not pursuing any financial programs or making any business-related expenditures without some level of professional guidance.

“With so much uncertainty, be sure to speak to your accountant and financial advisor to review your options before you spend any money during this time,” Marootian added.

To find more information about the PPP loan program, please visit: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp

To find more information about the EIDL, please visit: https://covid19relief.sba.gov

Robert Hall & Associates is currently offering complimentary consultations about taxes and other financial concerns. For more information, call 818-242-488 or email [email protected].

Allowing a Lender to Cross Collateralize Against Additional Property

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By Edward Brown

There are times when a lender is going to ask for additional [real estate] collateral in order to make a borrower a loan. The most likely scenario for this is when there is not enough equity in the target property. Other scenarios include a borrower with less than stellar credit, or the type or quality of the target property may not be enough to satisfy the lender to make the loan, as most lenders are more interested in making loans that will pay them back instead of facing foreclosures. For this reason, the lender may ask the borrower to put up additional collateral satisfactory to the lender so as to give the borrower an incentive to avoid defaulting on the loan.

In many cases, this cross collateralization may not be something the borrower worries about, as the borrower intends to pay the lender in full. The general plan is for the borrower to refinance the target property at a point where a new lender does not require cross collateralization, pay off the existing lender, and the existing lender releases both properties; however, what happens when the borrower sells the crossed property, or has the opportunity to refinance the target property, and there is not enough to pay off the current lender who crossed?

The danger here is that the lender may hold up the sale because it does not want to release their lien until they are paid in full. For example, let’s say the borrower owns a rental house that is worth $500,000 and there is a first mortgage in place for $200,000. The borrower wants to buy another rental for $800,000 and has $250,000 to put as a down payment. The borrower asks a lender to loan the remaining needed $550,000, but the lender is not comfortable with the LTV [68.75%], so the lender asks what other real estate the borrower owns, so it can cross collateralize its $550,000 loan. The borrower mentions the other rental, and the lender decides to ask for crossing on the first rental. Thus, the lender has lowered its risk because of the equity in the first rental.

Now, let’s say that the borrower receives an unsolicited offer for the first rental of $525,000, and he wishes to accept it. If there was no cross collateral against this property, the borrower could accept the offer, pay off the existing first of $200,000, and pocket the $325,000 remainder. However, because the rental has been crossed, the lender has $550,000 against the property in second position. That means that there is technically $750,000 of liens showing up against the property. The borrower cannot accept the $525,000 offer without having the second [the crossed loan] release its lien.

For this reason, it is imperative for there to be an agreed upon release price in which the lender agrees ahead of time to release its interest in either properties for a specific sum. It does not necessarily have to be just the remaining equity in the first sale [$325,000 in our example]. The release price could be a smaller amount. It could also be a larger amount [up to what the lender is owed]. If the lender desires more than the $325,000, the borrower would have to come up with additional cash in order to transact the sale. This may not be all bad, as the crossed lender’s loan has then been reduced.

For example, if the crossed rental was sold at a 5 CAP rate, and the crossed lender’s interest rate was 7%, the borrower may choose to sell the rental and come up with money to satisfy the lender should the lender want more than the $325,000 net proceeds from the sale. In other words, there are times when it makes economic sense to come up with money in order to sell property. Another similar scenario like this occurs when there is a blanket loan covering multiple properties, as is the case when an apartment building has been converted to condos and the owner of the building desires to sell off one condo at a time. A typical lender on the building will usually have release prices [agreed ahead of time] under which the lender will allow each unit to be sold and the lender takes a specific amount [or percentage of each sale] as a pay-down of its loan.

The release price can be negotiated between borrower and lender. Because the lender did not take the new property alone due to the high LTV, many times the lender will reduce its pay-down to where it feels comfortable with a specific amount of its loan on the remaining property. To make this point clear, let’s say that the lender usually makes loans for rental properties at an LTV of no more than 55%. Since the new rental was purchased for $800,000, the lender would be fine with a loan balance of $440,000. Thus, in order for the lender’s exposure to be reduced from its original loan of $550,000, it may be willing to accept $110,000 from the sale of the first rental in order for the lender to release its crossed lien. In this case, the borrower would sell the first rental for $525,000, pay off the first mortgage of $200,000, and pay the lender in second position $110,000 [to release its crossed lien of $550,000], and pocket the rest of the proceeds from the sale [$215,000]. The borrower would keep $215,000 from the sale, and the only debt on the second rental would be the lender [who crossed] of $440,000.

Borrowers who overlook release prices [a specific clause in the loan documents] risk having to ask the crossed lender after the fact under what circumstances the lender would be willing to release the first property. If there is no agreement ahead of time, the borrower runs the risk of being at the mercy of the lender, as the lender does not have an obligation to release its lien for less than what it is owed.

Many lenders may be willing to work out a reasonable amount for releasing either property, as it is in the lenders best interest to reduce the borrower’s default risk. Having more than one property as collateral sounds good in principle, but the added exposure of having a loan spread out amongst more than one property may not be worth the risk. Each situation will be different, but, as a general rule, it is more conservative from the lender’s viewpoint to have a low LTV on one property compared to having crossed on one or more additional properties that have a higher LTV. Additional costs of foreclosure, if needed on more than one property, as well as having to deal with an existing first mortgage [keeping them current, so that lender does not foreclose] may not be a desirable solution to protecting the lender’s interest.

This is the primary reason why typical banks do not usually cross collateralize their loans. Most banks do not like a lot of moving parts. They want to focus on one property and the risk associated with it.

Borrowers should make sure that the lender does not hold any of the borrower’s properties hostage and that release prices are set at a point where the borrower feel comfortable.

 

Edward Brown

Edward Brown currently hosts two radio shows, The Best of Investing and Sports Econ 101. He is also in the Investor Relations department for Pacific Private Money, a private real estate lending company. Edward has published many articles in various financial magazines as well as been an expert on CNN, in addition to appearing as an expert witness and consultant in cases involving investments and analysis of financial statements and tax returns.