Thinking Like A Lender

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Question 1 of 11

1. Question
What is a hard money lender?
- A lender that it's really hard to get money from because flipping is risky
- A short-term lender who specifically lends on investment deals at higher interest rates
- A lender who requires typical documents and timelines but only lends on flips
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Question 2 of 11

2. Question
What does LTV stand for?
- Loan To Value
- Learn to Value
- Limit To Value
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Question 3 of 11

3. Question
What is the purpose of a Promissory Note?
- To outline the specifics of the loan in a private document
- To give a lender equitable title
- To record to give the lender title to your property
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Hint

Think of the words “I promise to pay”
Question 4 of 11

4. Question
What is a Deed of Trust?
- A document between the Borrower and Buyer to purchase the house
- A document between the Buyer and Lender to secure the loan against the property, like a mortgage
- A document between the Seller and the Buyer to convey title to the property
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Question 5 of 11

5. Question
What does SOW stand for?
- Scope of Work or "Scope"
- Settlement of Work
- Scope of Workers
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Question 6 of 11

6. Question
What is an Interest Only payment?
- A loan payment that includes the principal, interest, taxes and insurance
- A loan payment that includes the principal and interest
- A loan payment that only accounts for the interest portion of the payment
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Question 7 of 11

7. Question
What is a warranty Deed?
- A recorded document that conveys the property to the new owner
- An unrecorded document that outlines the loan between Buyer and Lender
- A recorded document that secures the Lenders loan to the property
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Question 8 of 11

8. Question
Why is it important to know these concepts and vocabulary as a flipper?
- This response will be awarded full points automatically, but it will be reviewed and possibly adjusted after submission.
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Question 9 of 11

9. Question
What does Loan to Cost ratio mean?
- How much the total fees and interest will cost for your hard money loan, ie, points, fees, interest
- The total amount of the Lenders loan amount relative to the total costs for the project, ie, loan vs purchase price plus renovation
- The percentage of the lenders loan versus the projected full market value of the house
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Question 10 of 11

10. Question
What are some factors Lenders consider when they loan money on flip projects?
- Your experience level
- The type of property
- How much you like the area
- Market Conditions
- The price range of the house
- Your marital status
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Question 11 of 11

11. Question
What is the main reason to purchase a flip?
- Because it is profitable
- Because it seems fun as hobby
- Because I can brag I flipped a house
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