092: Financing Flips and Rentals With Lima One Capital

On today’s episode of the InvestFourMore Real Estate Podcast I interview Courtney Newmans of Lima One Capital. Lima One Capital lends money to fix and flippers as well as rental property owners. They are currently lending in 44 states and working on getting approved in every state in the U.S. Courtney actually started working with Lima One because he applied for a loan with them as a house flipper. Courtney liked how they did business and ended up getting a job with Lima, but still invests himself. I discuss many topics with Courtney including how he got started in real estate, what loans Lima One offers, how the loans work, and much more.

Who is Lima One Capital?

Courtney explains how Lima One started about 4 years ago as a local hard money lender. Lima was licensed in four states, but has since been licensed in all but 6 states. When Lima One started, the hard money lending world was much different. There were just a few national lenders and interest rates ranged from 14 to 18 percent with the investor paying 2 to 5 points on the loan. In the last couple of years the rates and fees have come down a lot due to increased competition. I have personally seen rates drop down to 12 percent, then 10 percent, and now there are multiple companies offering hard money loans below 9 percent with 2 points or less. To get the best rates you have to be an experienced investor, but even rates for beginners are much lower than they have been in the past.

How does a hard money loan work with Lima One?

Hard money is great for fix and flippers. Banks do not like to lend to flippers because they feel the loans are riskier and they like longer term loans. Most flippers only need a loan for 6 months or a year. It is possibly to get a short-term loan from a bank, but they are usually local banks. Many of the local banks will only lend money to experienced flippers. Hard money loans were created to provide financing for flippers who don’t or can’t use banks for loans. Hard money loans typically have higher rates than local banks, but they may finance more of the purchase price and repairs. Lima One has programs that will finance 90 percent of the purchase price and up to 100 percent of the rehab. Lima One’s rates vary based on the investor’s experience, but can be as low as 7.9 percent for extremely experienced flippers. Hard money lenders will not lend you all of the money at once, but use draws to finance the repairs once they are completed.

You can find out more about Lima One’s hard money lending program here: https://limaonecapital.com/hard-money-lp-1/

How does Lima One’s rental property financing program work?

Rental property owners have issues getting financing or refinancing their properties as well. Many banks do not want to finance more than four mortgages and there are very few that will finance more than ten. Banks usually have very strict criteria for credit scores, and debt to income ratios with investors. Lima One naturally has some restrictions on credit score, but they can be much more flexible than a bank with investor loans. They do not even look at debt to income ratios and require just a 600 credit score. They are not qualifying the borrower as much as they are qualifying the investment.

When you work with a national lender like Lima One, they are going to have slightly higher rates than a traditional bank. Their loan programs for rental properties include 30 year fixed rates from 6.5 to 8.5 percent. They will refinance up to 75 percent of the value of properties and up to 80 percent of new purchases.

You can also find out more information on their rental property program here: https://limaonecapital.com/hard-money-lp-1/

Will Lima One work with new investors?

Many new fix and flippers run into a catch 22. They want to get financing for a flip, because they do not have the cash to purchase and rehab a home. However, most lenders will not lend to flippers who have no experience. How can an investor gain experience if they cannot get a loan? Lima One will lend hard money to brand new fix and flippers. They will even lend money to investors who have never done a deal.

What else does Lima One Capital have to offer?

Not only does Lima One offer hard money, and rental property loans. They also offer new construction loans, and bridge loans. I have personally met Courtney at real estate conferences as well as many of the Lima One team. I know many investors who have closed loans with them and been very happy as well. I have been able to finance most of my deals with private money and local bank money, but they are a great option if those sources are not available. Again you can check some of their programs here: https://limaonecapital.com/hard-money-lp-1/

[0:00:58.6] MF: Hey everyone, it’s Mark Ferguson with InvestFourMore. Welcome to another episode of The InvestFourMore real estate podcast. I have a really cool guest on for today’s show, Courtney Newmans, who works with Lima One Capital. A really good company, I’ve worked with him in the past, they’re a rental property loan company as well as a hard money, fix and flip loan company.


So I know they’ve done deals. I’ve had some experiences with other companies in the past who did not do as well for me. So I met this guys, really fun guys. Courtney, thank you so much for being on the show, how are you doing?


[0:01:29.6] CN: I’m doing good Mark, thank you for having me.


[0:01:32.2] MF: No, I appreciate it. First off, before we get too much into the company and everything, you’re an investor yourself. So do you mind telling us just a little bit about what you’re up to?


[0:01:42.0] CN: Yeah, for me, I like fix and flipping so I’m not a real buy and hold guy. I’m young, I’m trying to build that capital for myself so I can go and buy me some more for one day. But right now, I’m trying to focus on doing anywhere from three to five flips a year in the Atlanta market and so I love those properties down there. That’s why, pretty much after I graduated, that’s why I started my professional work career and I just know that market like the back of my hand. It’s real competitive right now, but I love flipping in Atlanta.


[0:02:09.3] MF: I was going to ask you, I know that market’s crazy for landlords and flippers. How are you finding your deals down there? Is it on the MLS, or are you doing off market stuff?


[0:02:18.6] CN: It’s three different sources. So we’re doing off market stuff where we do [inaudible] out to people, the wholesaler’s from the real networking, I’m probably on about 120 different wholesalers lists.


So as soon as I get an email in, I know if it’s a good deal or not and then also, you can find deals off of the MLS but you’re usually paying over what the listing price is for those deals. But if the ARV is there, there’s definitely room to do that.


[0:02:41.0] MF: Cool. Yeah, that’s kind of exactly what I’m doing myself too. I’ve gotten most of my deals lately from wholesalers where a year ago I wasn’t getting anything from them. So it’s been a nice supplement where our MLS has dried up quite a bit. It’s a crazy market out there.


[0:02:56.9] CN: Definitely crazy. Everyone and their mothers wanted to invest, which is good but you got to make sure you’re doing the right thing, you’re taking all the boxes if you’re going to get into this business.


[0:03:05.4] MF: Yes, for sure. Speaking of that, now I’m not sure exactly when you started working with Lima, but they kind of start out working with flippers right?


[0:03:13.7] CN: Yes, so our bread and butter was working with investors. Me personally, I actually applied for a loan with Lima One Capital before I started working with the company. We’ve been in the industry going on seven years now. That was our bread and butter up to 2015 when we introduced our rental product to the market as well. We love working with flippers, that’s the heartbeat of the business, that’s what we believe in and making it easy for them to close loans.


[0:03:39.7] MF: What made you want to start working with the company? Have you been in the financial industry, is that kind of your background?


[0:03:45.3] CN: Yeah, so I was working for on the emerging services side, doing door to door to their sales, trying to sell car machines and then I got into financial service side of the industry, working for a financial firm out of Atlanta and I was like, “I love real estate,” and I applied for a loan but I wasn’t at the point where I was able to quit my full-time job and invest full-time and then I guess, just through conversation with the COO and CEO, I somehow saw the job opportunity on our website.


I went to the university of Georgia and I applied and I’ll tell you what the three days, they came down, interviewed me in Atlanta and next thing, you know, I was hired and then I really don’t see this as a job. I love working for Lima One because I get to work with investors, help them get into the product, I get to see the markets from a 40 state overview of all the markets and what’s going on different markets. I love the financial side of the business because I’m a little numbers guy but I also get the real estate side as well.


[0:04:39.7] MF: Very cool. It’s kind of funny how things work out like that sometimes. Seeing the market, like you said, all this different markets across the country, are you kind of seeing the same thing as far as markets being really tight, low inventory? Or are you seeing different things across the country?


[0:04:54.0] CN: That is the number one kicker is like, if you’re not marketing for your own deals, it’s really hard for you to find a deal out there. When the deals do come through, they are very tight. People are having to bring additional down payment to the table. Because when I started in the industry, you were tapped at 65% loan to value. That’s what clears down the 20% loan down payment.


Now, you get more leverage from the hard money lenders, some people are doing 100% financing, we’re doing only 10% down and you’re going up to 70-75% ARV on different products. The market is showing that it is tighter but there’s still equity and some properties will get deals done.


[0:05:28.5] MF: Awesome. Have you seen any other change? Because I remember when I first started my blog in 2013, I’d been an investor buying rentals and flips but I never even really heard of hard money until I got into the online real estate world and realized how much I didn’t know about things.


At that point, it seemed like rates were so much higher and points were higher, all the companies seemed to be really local. What else has evolved over the years with hard money?


[0:05:54.9] CN: I can just tell you, when I started working for the company back in 2011, it was me, just going through the [inaudible]. We were a localized company, we were in Georgia, South Carolina, and North Carolina. We knew we had a vision to become a national lender but at that time, we were pretty much a regional player. It was me and two other hard money lenders in the Atlanta area and rates ranging from four to five points to 13 to 15% interest and that was the norm, that’s what people were paying.


Over the time, is say like probably two years ago, a lot of liquidity came into our market place and that’s from the capital markets and we were attracted to that as well and so when you have that competition and the liquidity coming in from a different investment banks throughout the United States even on the west coast or the east coast then we saw the compression and the rate’s going down and everything becoming more competitive.


So you have rates now as low as 7.99% and people were paying one or two points on a loan so you almost get a regular mortgage for a hard money loan. But it’s because of that liquidity that’s come in the space that’s really dropped the rates and given additional leverage for investors out there.


[0:07:03.5] MF: Right, and I’ve seen that too and rates yeah, are so much cheaper than they were a few years ago. With that, have you seen more or less companies in the space?


[0:07:13.4] CN: I would say, you have to categorize it. It really wasn’t more than three or four national lenders when I first started and now you have about people that are doing, I will say national lenders, they’re lending in 20 plus states. You probably have anywhere from seven to 10 companies that are doing it on a national scale and then you have your regional players, and then you have your localized guide. It’s so much competition across the board with the hard money industry.


Backwards five years, it was definitely not as much competition when it comes to lending, it was like, everyone was either on the regionals and then they’re in the back yard.


When they saw this opportunity to be able to scale and become national, even us, we saw the opportunity to grab market share and we did it.


[0:07:52.9] MF: Right, I’ve seen that too. When I first started there was kind of one local lender around here who I knew who charged about 16% interest in four points. How do you make any money doing that? But yeah, things have changed quite a bit.


As far as you’re lending and the hard money, how hard was it to expand into different states and kind of become that national lender?


[0:08:16.0] CN: Well, our company is built on military principles. You have two former infantries officers that ran this ship around here and you have the military guy, they’re so operation and system based. I think they brought what they learned in the Marines to the corporate structure of what we have here.


It was a little challenging to be able to get marketshare as far as marketing. But as far as on the operational side and customer service side, I think that’s what really helped us scale in a three year period from landing in four states to landing in 44 states throughout the United States.


[0:08:47.1] MF: I didn’t know you guys have grown that fast. That’s a lot.


[0:08:50.4] CN: Yeah, definitely, it’s a lot.


[0:08:52.9] MF: Cool. Now you said when you first tried to get your loan, you didn’t quite qualify for it yet. What were the problems you had when you were first trying to qualify for that loan?


[0:09:02.2] CN: I actually did qualify, I’m going to be very honest, I qualified, I got a pre approval letter, but I didn’t pull the trigger. I was like a lot of people that was stuck on the sideline and was scared to be able to jump out there in the water and do your first flips. Because I didn’t really have a knowledge of doing the construction. I knew what a deal looked like, I knew how to calculate it, I knew what everything was but I wasn’t quite sure of what I needed to do as far as getting the house, what buyers are looking for.


That information came over time and learning from different investors and seeing what they were doing and then that’s really what made me pull the trigger and do my first house, but I did get pre-approved. I was actually 22 at the time.


[0:09:43.3] MF: Wow, and speaking of approving for hard money loans and we’ll talk about some of the rental property loans too a little bit later, but so many people run in to problems getting a regular mortgage or long term mortgage or short term mortgage with banks because they have high debt to income ratios, their work history isn’t there, other problems.


It’s completely different when qualifying for hard money. So can you walk through a little bit of what the process is to qualify for a hard money loan?


[0:10:10.0] CN: Yes. So I will say you want to take it into two separate categories. First, we’re going to underwrite the borrower and what I say, we use common sense on the writing. We’re going to look to make sure that that borrower has a minimum of a 600 credit score and no foreclosure  or bankruptcies in the past four years. That’s our minimum credit requirement.


Then we’re going to look at the liquidity of the borrower, the more liquidity that they can show, the more their opportunity to get a loan with us. For us, we just look at you’re having a minimum of $15,000 to take away, and that can be between two people within an LLC, three people, whatever. So we are able to work with them and try to build relationship to make sure they’re able to get into their first deal because a lot of companies won’t even work with people that have never done a deal before.


That’s how we build our business relationships. Started with people, lend to them, and they become monsters throughout the time where they start off doing one flip every two years or doing two flips every year and now they’re doing anywhere from 10 to 15 a year. We love working with that industry.


[0:11:07.0] MF: That’s really good. I was just going to say, I’ve talked to quite a few hard money lenders and a lot of investors and there are very few who will work with new investors. It’s kind of a catch 22 where they want you to have experience before they’ll lend to you, but how can the investor gain any experience if no one will lend to them. That one’s kind of hard to get started.


[0:11:24.4] CN: That is very true. We just take a common sense underwriter when it comes to looking at the borrower, making sure they have liquidity and that making sure they have a member credit score. Because if you're not paying your house note or your car note then we know you’re not going to pay us. We just take a common sense underwriting approach for the borrower.


[0:11:43.1] MF: Yeah, for those who don’t know, it usually can be very frustrating working with banks because you can have a ton of cash, you can have all these assets but the banks won’t lend you because of high debt income or other factors where it’s nice to see the common sense approach with some companies.


[0:11:59.0] CN: Definitely. It’s not rocket science. I think the second part, which is really easy, it’s the property underwriter. Once we pre-approve a borrower, getting them the pre-approval letter that they can go out and make offers. Once they get a property on the contract, then what we’re looking at is, they send us over the sales contracts and the scope will work for the property. What repairs are going to be done to that property and then what we’ll order is what we call a subject-to appraisal, an ARV appraisal, and that’s going to determine what the value of that property is once it’s fixed up. That’s pretty much going to be the end all, it getting that appraisal and getting it done to seeing what the after repair value that property is going to be.


[0:12:34.0] MF: Right. What’s nice about hard money lenders is many local banks, I work with local banks and a lot of them will just lend on the purchase price. So maybe it’s 80% of the purchase price but if you can find good hard money lender or sometimes local banks, they’ll lend the purchase price plus some of their repairs.


So you said a little bit about how you’ll go on the ARV, can you talk about how you finance the initial purchase and also the repairs?


[0:12:55.7] CN: Okay, definitely. Just take it for example, easy numbers; you’re buying a property for $60,000, I know some in the west coast people will laugh at that. Let’s say you bought a property for $60,000 and your renovation cost is $40,000. For us, we’re going to lend 90% on your loan to cost but you only have to put down 10%.


So out of that $100,000 you come to the table with $10,000 down. What we’ll do is take that 90% there when lending you and divide it by the ARV on the property. The mats that we’ll lend is 70%. Let’s call it say that property is going to appraise for let’s say 150. You take that 90,000 we lend you, divide it by 150 and you get 60% loan to either repair value. In that case we would do that deal all day long because it doesn’t see 70% ARV.


[0:13:46.5] MF: Great. Yeah, that’s a very simple way to do it and really nice to see lenders doing that now. Now, as far as when you lend the money, you use draws as kind of like a construction loan to pay out for the repairs?


[0:13:58.5] CN: Yes, when you close on a loan with use, just as an example, we just gave that $40,000 that you have in construction, goes into our escrow account and we release funds as work is being done on the property. We’re going to go out, we’re going to send an inspector out to make sure that if your contract say that the farming is done, the sheet rock is in there, the rough electricals in there, the rough plumbing is there.


We’re going to make sure that that’s done. If they only do it 50% of the rough plumbing that’s in the walls and the walls are not closed up yet, well we’re going to get 50 kind of line item. We do draw and we give you as many draws as you want on that property.


[0:14:32.5] MF: Awesome. Let’s see what other questions I’m going to ask real quick. The rates you said? For you guys it starting at about $10.99 is that right?


[0:14:41.4] CN: Yeah, we go as low as 7.99% for our high elite clients. We start out at three and a half and 12 for our newbie investors and go as low as two points and 9.99% with our physics advantage program and then we also have a lot of credit program as well that’s for our super elite investors that go as low as 7.99%.


[0:14:59.9] MF: You have to tell me what qualifies as a super elite investor.


[0:15:05.6] CN: The super elite are investors that are doing 20 plus a yea.


[0:15:09.0] MF: Okay, cool. How does that line of credit work? Is it a true line of credit or do they still have to go through underwriting for each property? How is that setup?


[0:15:16.7] CN: We’ll qualify, the company uses the company on the front end and we’ll give them a 90% loan of cost and then say we say, “Hey, you have $10 million dollars at your disposal before a year turn to buy and renovate properties. Only thing after that point , once we pre-approve them, only thing that we’re just going to do is make sure they have the liquidity at their disposal at the time they need it to close the loan and we’ll also… they’ll do the appraisal on each property but other than that, we issued t hem a line of credit for 10 million dollars and they have that at their disposal, and know that they have a commitment from Lima One Capital to buy as many properties as they want.


[0:15:49.6] MF: Very cool. As far as doing the appraisals and getting the loans closed, how long does it usually take you guys to get approval and actually fund the deal?


[0:16:00.0] CN: It depends on what area you're in. Usually, anywhere from seven to 10 business days, we’re able to close the loan.


[0:16:04.8] MF: I’m guessing a lot of that depends on the appraisal and how soon that can be done?


[0:16:08.3] CN: Exactly. Because in places like Washington, the appraisals are backed up like three to four weeks so it takes like anywhere from 21 to 28 days to get an appraisal done.


[0:16:19.3] MF: Yeah, we’re seeing that here too in Colorado but it actually has loosened up a little bit the last few months just because there’s no houses for sale and I think some of the refinances have slowed down so we can get appraisals done faster. But yeah, for a while it was like three or four weeks here too and it’s just so frustrating.


[0:16:34.8] CN: I know, especially if you have a good deal right there on the table, ready to get going.


[0:16:38.7] MF: Right. Does One Lima one have any goals or any plans for the future to expand, or what are you guys looking to do with the company?


[0:16:47.9] CN: We want to be here to service investors throughout the United States. For us, we are lending, we open up next week in [inaudible], in the state of New York, that’s been one place that people have asked us to come to. We just expanded to the west coast, fourth quarter last year, beginning of this year so we’re lending in Arizona, California, Washington, Oregon, all your west coast states and so for us, we just want to be able to go out and build those relationship with clients and pay bills and get resource for them and be their money partner to help them leverage and scale and be of their business.


[0:17:18.2] MF: Very cool. Yeah, I’ve talked to a lot of different companies and I have not met one that lends in all 50 states yet just because you got to go through different regulations for every single state and it just sounds like a giant pain.


[0:17:31.3] CN: It is. We’ve been pending on our licenses in Nevada for about two months now so we’re hoping to get that very soon and I think that will be the — we have that a bit blurry grey area on that. We want to fill that in with blue and say, “Hey, we’re really a west coast vendor as well.”


[0:17:45.6] MF: Nice. Very cool Courtney. Well, I’ll have links to you guys to contact Lima One for fix and flip loans and line of credits and all that. I also want to touch just a little bit on your rental property loans because I know you guys started doing that recently. Can you give us kind of a brief synopsis of how your rental property loans work?


[0:18:01.9] CN: Yeah, for us we have what we call our rental three and that rental property loan is for people that are buying properties and call them as long term cash flow property. For us, unlike the banks, we’re not capitulating personal debt income ratio. We know real estate investors including myself, we have a lot of write offs on our taxes and especially 1099 people, we have a lot of write offs on our taxes. So when we look at that, we’re qualifying the property versus you as an individuals.


When we do our underwriting for the borrower, we are looking for a certain credit criteria to make sure they have a certain credit score and that they don’t have any mortgage lates on their file but it’s still a very common sense underwriting approach where there’s no foreclosure banks within the past four years and then we qualify the property based on the debt service. We’ll lend up to 75% loan to value on that property and sometimes for purchasing can go up to 80% loan to value and for us, what we’re looking at is the debt service for the property.


We’re making sure that that property hits a minimum of a 1.3 debt service coverage ratio, one again that’s DSCR, debt service coverage ratio, and how we calculate that is we take the gross rent and divide it by what the PITI payment would be and we just do it as an easy formula like that. For example if you have a property that’s renting out for $1,300 a month and your PITI payment is a thousand then that ratio is at 1.3. As long as that ratio is at 1.3 or above, we’re going to do the deal for you.


[0:19:26.2] MF: Awesome and most good rental properties should qualify for that. I think if you’re below those numbers it’s pretty questionable how much cash flow and how good of an investment it is going to be.


[0:19:36.5] CN: Definitely.


[0:19:37.7] MF: And what kind of rates and terms are you looking — Those are actually 30 year fixed right?


[0:19:42.9] CN: Yes, 30 year fixed rates. Right now we are offering rates anywhere from the ranges of six and a half up to eight and a half percent and it just depends on loan to value and credit score.


[0:19:53.2] MF: Awesome. So yeah, I know there’s a lot of people who run into problems of getting those rental property loans with the big banks especially. Once you get four mortgages, most of the big banks just stop lending to you. Once you get to 10, it’s virtually impossible to get any big bank loans and so your choices are either local banks, which can be all over the place with 30 year amortizations maybe it’s 20 years or 25.


A lot of them have ARMS, rates can be all over the board as well so it’s been really cool to see the different national lenders offer investors and option that was not there before.


[0:20:26.3] CN: Definitely and then we do have another product that will be launching next Monday, by the way. and it’s called our two plus one loan and this one gives people the opportunity to refinance if they bought a property for cash or they are in a hard money loan and they want to get out and have a bridge product between their hard money loan or cash purchase and long term financing.


And we’ll go up to 75% on that one and that rent for that property, that loan is a two year term with the option to extent it another year and we do an interest only on that one. So cashflow is going to be phenomenal for an investor right off the bat with that and we’ll go up to 75% loan to value on that product as well.


[0:21:03.8] MF: Very nice, I haven’t heard on that one yet so.


[0:21:06.2] CN: Yeah, you’re the first to know.


[0:21:09.3] MF: By the time this podcast airs, it will be Monday already, so it will be available.


[0:21:14.3] CN: It will be available, yes definitely.


[0:21:16.8] MF: Awesome. So very cool programs with the loan properties and the fix and flips. I can tell from experience, I’ve sent people to your guys and you guys have closed the loans. You’ve done deals and I’ve worked personally with some other companies in the past where it was shady. I tried to do some refinances myself with a company that never worked out. So I only have people on my show or promote them that I know are doing deals in a good company. So I appreciate you guys actually doing what you say you’re doing.


[0:21:44.0] CN: Yes, definitely.


[0:21:46.2] MF: Great information. Before we head out of here, I had a few more questions for you. First, you’re working with flippers, with rental property investors all over the country. What are some of the most common mistakes you see them making and how can people avoid them?


[0:21:59.7] CN: I think the number mistake and I think I made this mistake myself as well is you’ve got to work with a reputable contractor or a licensed GC and you need to get references from them. That is the number one mistake that people are going to run into because for us we’re going to underwrite the deal, make sure the equity is there, verify everything on an appraisal standpoint. But where people lose money and people lose time is from working with bad contractors.


[0:22:27.4] MF: I have experience with that myself.


[0:22:30.8] CN: I think that’s the number one tool we’ll see because we’ll get red flags where they say, “Hey why is this project a $40,000 renovation? Why is this project taken seven months to get into?” Because the longer you hold that project the more interest you’re going to pay on that loan. So you’re losing money from day one.


So you want to make sure you have a contract that is going to be able to have the financial ability to be able to carry this project, go in there, asking you for a draw every two days. You don’t need to be working with that contractor. So you want to make sure you have someone that’s reputable, can do their work, and get it done on time for you.


[0:23:01.8] MF: Right and that brings another question, let’s say someone is getting a loan for you guys. They’re running into huge problems. Maybe they took on a big project, had a bad contractor, what if they come up on a year and they don’t have the house closed? Do you have options? Can you extend the loans on those?


[0:23:17.9] CN: Yes, if the borrow had open communication with us and has been paying their monthly payments on time, we have no problem extending and we work with it on a case by case scenario. But we’re here to work with our investors. We don’t want to foreclose on them.


[0:23:31.4] MF: Right, you don’t want properties.


[0:23:33.1] CN: Right.


[0:23:33.8] MF: Very cool. What do you see, I will ask you another question, maybe we can answer this one. Your most successful investors, what do you see some of the trades and some of the things there doing that might help other investors?


[0:23:45.3] CN: I think they hone in on a market in a particular strategy and they perfect their particular strategy and they don’t stray away from it. So if their focus is doing new construction, they do new construction. If they have a certain price point or a certain construction category, they don’t want to go past 40 to $50,000 in construction, they stay in that price point and they perfect their price point and they repeat that model over and over and over again.


I think that’s what the people who are successfully is that they hone in on a certain neighborhood for a certain price point and that’s what they perfect instead of jumping all around different price points to be able to capture the deal instead of making the deals work for them.


[0:24:22.8] MF: Great information. Speaking of, do you guys do new construction loans?


[0:24:26.0] CN: Of course, we love it.


[0:24:28.3] MF: Okay, I didn’t know that so.


[0:24:29.9] CN: Yeah, we do new construction loans, we do it the same way 90% of the lot purchasing and construction cost.


[0:24:35.7] MF: Okay, this is one more question that I have for you. You’re seeing all kinds of different markets and different investors, are you seeing any increase in new construction or has it been pretty flat?


[0:24:46.0] CN: No, we have a large demand from it. We’re working with different groups that are building. We’ve got one group in Florida that’s building about 60 houses a year and we got one out in Phoenix that is looking to build and often had in Arizona and they are trying to do 25 to 30 spec houses a year. So I think that’s where people are going is — because they can’t find houses to rehab — new construction. You get a premium on the sales price of the construction as well. They’re trying to go into that arena as well.


[0:25:10.8] MF: Okay. We’re seeing almost no building here in Colorado for single family and yeah, our market just keeps going up. So I was curious to what you are seeing around the rest of the country.


Awesome, well I think those are all the questions that I had. A lot of really good information. Anything else you want to add before we head out of here?


[0:25:28.6] CN: I think you covered it all. I am looking forward to seeing you in Miami. You’re still coming down, right?


[0:25:33.8] MF: Yeah, I’m planning on it. So he is talking about the IMN Conference in Miami, which is in May. Really great conference if you are interested in real estate at all. Tons of lenders and vendors and all kinds of people down there. So yep, I went there in Arizona and had a great time so I am looking forward to it again.


[0:25:50.6] CN: Sounds good. But I think we’ve covered all of our bases. I’d say we’re good to go.


[0:25:55.1] MF: Cool, all right. Well yeah, like I said we’ll have notes on the podcast of how to contact you guys, how to get in touch, simple qualification process. You guys are real open and honest about everything so I appreciate that and yeah, great talking with you Courtney and thank you so much for being on the show.


[0:26:08.7] CN: Oh no, thank you Mark. I really appreciate it and if you guys have any questions or concerns, you can call in. We have reps throughout the country. You call in and ask for Courtney as well. We’ll be able to help you, we have inside sales team here so we’re here at your service.


[0:26:21.3] MF: All right, great. Thank you so much, again. Have a great rest of the week and yeah, we’ll keep in touch for sure.


[0:26:26.6] CN: All right sounds good Mark, I really appreciate it.


[0:26:28.5] MF: All right, thank you.



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