Private Lenders' Podcast Q & A from Hard Money Mastermind - #249
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Feb 20, 2025 The hosts dive into the art of creating an effective borrower scorecard, evaluating candidates based on financial liquidity and communication skills. They tackle borrower negotiations, emphasizing the importance of consistent pricing to maintain strong relationships. The discussion on fix-and-flip lending highlights the balance of risk and reward, focusing more on borrower character than just credit scores. Lastly, practical strategies for assessing After Repair Value (ARV) make the complex world of real estate investment more navigable.
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Borrower Scorecard
- Create a borrower scorecard to assess potential borrowers.
- Include criteria like cash on hand, credit score, experience, and homeownership.
Scoring Borrowers
- Factor in a borrower's responsiveness and communication skills.
- Consider construction budget relative to the purchase price, as this indicates risk.
Consistent Pricing
- Chris and Jason don't negotiate on price; their terms are consistent for all borrowers.
- They lost a borrower who wanted cheaper terms, prioritizing consistent profit margins.