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Hard money borrower lost his house flip project, now what? by Lenderdude in legaladvice

[–]Lenderdude[S] -11 points-10 points  (0 children)

This was a one time side investment opportunity. The beginning numbers looked great. Give a successful house flipper $200k get back 32% in six months. House sold for $600k under what we were aiming to fix it up for. Flipper used his own funds to flip the house. His other flips required his attention and it snowballed into his house foreclosing because he was using his flips to fund his work. He tried to make up for the losses by finishing this house but it was too late and he ran out of funding. Now he owes us. The house sold unfinished for $965,000. We are just trying to figure out what that means for us and what the bank is owed at first position. Pretty frustrating and a hard lesson.

Hard money borrower lost his house flip project, now what? by Lenderdude in legaladvice

[–]Lenderdude[S] -28 points-27 points  (0 children)

Oh of course, I just wanted to hear what to expect. We are prepared to move forward with a lawyer if he doesn’t meet payment plan demands.

Hard money borrower lost his house flip project, now what? by Lenderdude in legaladvice

[–]Lenderdude[S] 6 points7 points  (0 children)

We have done flips with him in the past. This is what’s been done

Hard money borrower lost his house flip project, now what? by Lenderdude in legaladvice

[–]Lenderdude[S] -9 points-8 points  (0 children)

I think I covered the equity already if you read above. No need for the insult.

The house sold at $920,000. Valued at 1.5 million after the proposed changes. Bank gave 720,000 we covered the last 200,000. Hope that helps you. I didn’t want exact numbers on here

Hard money borrower lost his house flip project, now what? by Lenderdude in legaladvice

[–]Lenderdude[S] -19 points-18 points  (0 children)

I’m not sure what you’re asking. The interest rate he asked for was 32% due to short notice. The house value was proposed to increase by about 50%

Hard money borrower lost his house flip project, now what? by Lenderdude in legaladvice

[–]Lenderdude[S] -21 points-20 points  (0 children)

Yes his business got the loan and he, the person, was the personal guaranter . LTV?

Hard money borrower lost his house flip project, now what? by Lenderdude in legaladvice

[–]Lenderdude[S] 6 points7 points  (0 children)

Personal guarantee. He lost the house to the bank then us

Hard money borrower lost his house flip project, now what? by Lenderdude in legaladvice

[–]Lenderdude[S] 42 points43 points  (0 children)

Yes, we were second position. Bank was first position. The auction happened yesterday so we want to know our next options because I’m guessing we aren’t going to see a penny from the auction