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> I'm talking about houses that banks are not willing to touch in their current condition. If they're not willing to touch them in their current condition, it

> I'm talking about houses that banks are not willing to touch in their current condition. If they're not willing to touch them in their current condition, it seems strange that they loan me $300k with that house as collateral. If I can't make the renovation work financially, they're stuck with a shitbox, potentially one that I've done more harm than good to.

BeetleB 1y ago
> If they're not willing to touch them in their current condition, it seems strange that they loan me $300k with that house as collateral. Private lenders != Bank loans. And as another commenter clarified, when I said "bank loan" I meant the usual mortgage loans. https://lenderkit.com/blog/what-is-private-lending-and-how-it-works/ https://lenderkit.com/blog/what-is-private-lending-and-how-i... "What is private lending? Private lending is a financial avenue where borrowers get loans from private lenders — individuals or businesses instead of borrowing funds from a bank or a credit union." > If I can't make the renovation work financially, they're stuck with a shitbox, potentially one that I've done more harm than good to. Yes, and ...? Lending is always risky. That's why private lenders have very high interest rates. The private lender will assess how likely you are to succeed. They generally know RE fairly well, so they'll want your analysis on the worth of the house, and how you made the estimates on repairs. If they think you're way off, they'll just tell you why and not fund the deal. And they'll want to know what you're losing. If you're a blue collar person and are willing to put $50-75K of your own money into the enterprise, they know you have skin in the game. I appreciate the questions/counterpoints. Just keep in mind you're not arguing with someone who is merely arguing from a theoretical vantage point :-)
- pavel_lishin 1y ago
  Oh, I know! At this point I'm not arguing, I'm genuinely curious about how it works.

BeetleB 1y ago

> If they're not willing to touch them in their current condition, it seems strange that they loan me $300k with that house as collateral. Private lenders != Bank loans. And as another commenter clarified, when I said "bank loan" I meant the usual mortgage loans. https://lenderkit.com/blog/what-is-private-lending-and-how-it-works/ https://lenderkit.com/blog/what-is-private-lending-and-how-i... "What is private lending? Private lending is a financial avenue where borrowers get loans from private lenders — individuals or businesses instead of borrowing funds from a bank or a credit union." > If I can't make the renovation work financially, they're stuck with a shitbox, potentially one that I've done more harm than good to. Yes, and ...? Lending is always risky. That's why private lenders have very high interest rates. The private lender will assess how likely you are to succeed. They generally know RE fairly well, so they'll want your analysis on the worth of the house, and how you made the estimates on repairs. If they think you're way off, they'll just tell you why and not fund the deal. And they'll want to know what you're losing. If you're a blue collar person and are willing to put $50-75K of your own money into the enterprise, they know you have skin in the game. I appreciate the questions/counterpoints. Just keep in mind you're not arguing with someone who is merely arguing from a theoretical vantage point :-)

pavel_lishin 1y ago
Oh, I know! At this point I'm not arguing, I'm genuinely curious about how it works.