Do you provide loans for properties to be used for marijuana related business (retail, medical or cultivation)?
We do NOT provide loans for properties to be used for marijuana related business (retail, medical or cultivation, etc)? We do not knowingly provide loans for properties to be used for any illegal purposes, even if the illegality is related only to unenforced federal law.
What if the repairs (rehab work items) are more or less than I budgeted for in the Rehab Draw Account?
(Question and answer applies only to Fix & Flip and Fix & Hold Loans)
During the hard money loan application process, you will provide us a detailed list or your expected rehab costs, by line-item. For a brief and simple example, let’s assume $3,500 for a new roof, $2,500 to refinish hardwood floors, $1,500 for a stainless kitchen package, $1,000 for kitchen countertops and $1,500 for kitchen cabinets. That’s a total rehab budget of $10,000.
We then calculate the amount Reimbursement Percentage, which is equal to the amount borrowed for rehab from Good Funds Lending, LLC divided by the total rehab budget (e.g. if you borrowed $10,000 and the rehab budget is $10,000 then the Reimbursement Percentage is 100%. if you borrowed $8,000 and the rehab budget is $10,000 then the Reimbursement Percentage is 80%).
Under Budget – Let’s say you complete the hardwood floors but find someone who can complete the job for $2,000. You would submit the draw request, the lien waiver, and photo of the finished floor (let’s assume that the floor is the only work item for this draw request although it is common to submit many items per draw request). If everything is in order and the work has been completed to a professional standard and manner and appropriate like, kind and quality, your disbursement is granted for the original budgeted amount of $2,500 multiplied by the Reimbursement Percentage (Additionally the $75 draw request fee taken from the draw account and paid to the loan servicer). You can never draw more than what has been borrowed. The last draw is typically lower than the amount of the work items in that draw because the draw request fees that have been paid. Hence if there have been 2 draws (draw requests), there would be a $150 in draw request fees).
Over Budget — Let’s say you complete the roof, but it goes over budget and costs $4,000 and you did not speak to us earlier and there were no changes to allocation across work items. You would submit the draw request, the lien waiver, the finalled permit and photo of the finished roof (let’s assume that the roof is the only work item for this draw request although it is common to submit many items per draw request). If everything is in order, your draw request would be granted, but only for $3,500 multiplied by the Reimbursement Percentage (the $75 draw request fee taken from the draw account and paid to the loan servicer). You can never draw more than what has been borrowed. The last draw is typically lower than the amount of the work items in that draw because the draw request fees that have been paid. Hence if there have been 2 draws (draw requests), there would be a $150 in draw request fees).
Provided that you complete all of the items on time and there are no defaults, you will be able to draw the full borrowed rehab amount minus draw request fees at $75 each, even if you come in over budget. If you come in over budget, your the amount you can draw is the same.
We are a Colorado hard money lender for non-owner occupied properties in the Colorado Denver Metro Area.
What if after I start the project and determine I need to change rehab work items for the rehab draw account?
(Question and answer applies only to Fix & Flip and Fix & Hold Loans)
Please open a dialog with us as early as possible. Although we don’t change the total amount of draw account or loan amount, but we typically try to be flexible in allocation and work items assuming we believe the changes are financially wise and we have been kept in the loop.
In general no, we will only loan as the first and only lien holder. As the loan is a hard money loan we want the hard asset (i.e. the property) to be unencumbered by other loans, whether subordinate or superior to our loan. In some cases we require a first lien on the project property and may be secured by junior liens on other properties.
No. We cannot properly inspect the property and verify that it is not owner-occupied and otherwise mitigate risks for the hard money loan.
At this time, we provide hard money loans almost exclusively on non-owner-occupied residential properties. In some cases we will provide hard money loans on small commercial buildings. We typically will not lend on condos, townhomes or attached homes unless all units of the structure are included (i.e. both sides of a duplex, but not half a duplex). Our primary focus is the Denver metro area and we will also lend in Boulder and Colorado Springs. If we have experience with you, we may consider other areas in Colorado and other types of properties as well.
As direct private hard money lender, we do not use an appraiser. We will review your proposed rehab budget and expected level of finishes/improvements and compare your intended finished product with similar properties sold in the area in the most recent 6-12 months, based on the MLS and county records, using net price after any seller concessions. We may make adjustments based on other similar properties that are currently for sale nearby. We typically estimate market value of properties based on what we believe will be a price likely to produce a sale with in 30-45 days on the market. One of the benefits of using a local Colorado direct private hard money lender that does not use appraisers is that we are free to consider information from the borrower if relevant, when making our estimate of value.
(Good Funds Lending, LLC provides hard money loans in the Colorado Denver Metro area)
For the pre-approval application, we will perform a cursory evaluation of your financial estimates for the project (purchase/acquisition cost, rehab budget, after repair value), and your level of experience and your answers to few other questions. If we believe there is a reasonable likelihood that we would make a loan based on the information provided, we will inform you that you are pre-approved. If approved, and you request a pre-approval letter (Often pre-approval letters are submitted with offers on properties; however, some borrowers may choose to complete a pre-approval application after the property is under contract). A pre-approval is not a guarantee that the loan will be approved or made.
For the full application you provide more details regarding the project and your experience. We more carefully review the borrowers and project. We evaluate the current and after repair value of the property and closely review the expected repair/rehab costs. We examine credit history (via a “soft pull” working with the potential borrowers using a service like CreditKarma.com or a “hard credit check”) of all human borrowers. We do not look for a minimum credit score, but primarily focus on your credit activities/events in the last two years. Prior to making a decision on a loan commitment we typically do a property walk through with one of the borrowers.
At some point prior to a loan commitment we need to meet all human borrowers on the loan and take a picture of each driver license (or State ID) and do a property walk through.
Hard Money is not always the correct solution. Before using hard money, you should explore other financing options available. We are building a Colorado hard money business focused repeat business where our borrowers use our hard money lending services only when appropriate and as one part of their financing strategy. We are a private lender seeking:
- To provide loan beneficial to the community, the borrowers, and Good Funds Lending, LLC
- Long-term relationships with ethical people
- Borrowers strategically using hard money, often because banks and credit unions are too slow or unreasonalbe to capitalize on an opportunity.
Hard money is not always the best solution. You should consider other options before using hard money.
Our Colorado hard money business is aimed at helping smart and ethical borrowers, where our borrowers use our hard money loans only when appropriate and as a part of their financing strategy.
Answers to frequently asked questions regarding Good Funds Lending, LLC and Colorado hard money loans are available on our Frequently Asked Questions Page.
Colorado hard money loans for single family, multi-unit residential (2-40 units), operating/occupied commercial , and operating/occupied industrial properties in the Denver Metro Area (residential properties must be non-owner occupied).
Colorado is a wonderful place to live and do business. We are happy to be a part of the Denver business community.