Section 6 Quiz

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Question 1 of 20

1. Question
What are the main questions a lender considers when we are requesting funding? (Select all that apply)
- The current LIBOR and Federal Funds rates
- The full retail value of the property
- How much experience I have as the Buyer
- My current employment situation
- The loan amount requested
- The amount of rehab needed
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Question 2 of 20

2. Question
TRUE OR FALSE – FHA and Conventional Loans are just as easy to get for investment properties as hard money
- TRUE – FHA and Conventional loans are smooth and easy to get for fix and flips
- FALSE – FHA and Conventional loans aren't really meant for fix and flips
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Question 3 of 20

3. Question
Why would it be helpful to have multiple lenders whom you’re familiar with their loan programs? Choose the right answer.
- So I know who's interest rate is the lowest, because that the most important item
- To understand the difference in specifics so I'm aligning with the best match and timeline for a deal
- To get my personal finances in order so I can get funded
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Question 4 of 20

4. Question
What’s the major difference between hard money lenders and private money lenders? Choose the correct answer
- Private money lenders may negotiate lower rates and better terms with you
- Private money lenders can do business with handshakes and emails instead of all the confusing hard money documents
- Private money lenders never care about your experience level and are more willing to take a chance on you
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Question 5 of 20

5. Question
True or False – We present a deal the same way every time to a PML
- TRUE – It makes it simple, efficient and professional
- FALSE – Because it's a private individual, it's better to keep it casual
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Question 6 of 20

6. Question
What phrases are helpful to use when attracting PML’s? Choose all that apply
- I just found a really good deal and I'm looking for a Lender partner for this project
- I'm a real estate investor and I partner with Lenders on projects I find. It allows me to go out and find more good deals.
- I am guaranteeing 20% returns on any money someone gives me without risk because it's tied to real estate
- Would you like to be added to my list as I find good deals and receive an introductory letter?
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Question 7 of 20

7. Question
True or False – Once a PML and you decide it’s a good match, they are fine to give you the max amount of money they have to invest right away
- TRUE – If you explain it well and they know it's a good deal, most lenders will give you the maximum amounts they have to invest
- FALSE – Most lenders want to test you out a little first before they give you go all in
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Question 8 of 20

8. Question
True or False – It’s normal for PML’s to talk amongst their friends and associates and potentially introduce you to more PML’s
- TRUE – People like to discuss good investments among their friends, golf buddies, etc.
- FALSE – Many PML's are just retired people who want better returns and don't really have referral networks
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Question 9 of 20

9. Question
True or False – Anyone who is willing to give you money is a good PML
- TRUE – The most important thing is that someone has money that can help you fund a deal
- FALSE – Just because someone has money to invest does not mean you both are a good match
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Question 10 of 20

10. Question
What are the 3 important questions to ask any potential PML?
- Are you looking to invest in short term or long term projects?
- What types of returns are you looking for?
- What's the bare minimum interest rate you'll accept?
- Would you be using your IRA or other retirement account?
- What's the most money you're willing to commit to a deal?
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Question 11 of 20

11. Question
What are the TWO documents any lender is provided for in exchange for lending funds?
- Warranty Deed
- Deed of Trust / Mortgage
- Promissory Note
- Amortization Schedule
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Question 12 of 20

12. Question
True or False – in GAP funding, the 1st lender doesn’t need to know if you’re using a PML 2nd mortgage
- TRUE – You don't need approval since it's your project; only the 2nd lender needs to be OK with the arrangement
- FALSE – You need to disclose the arrangement to both lenders, as the first may need to approve it
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Question 13 of 20

13. Question
What are other avenues for down payment/rehab costs/remaining funds needed for a flip? Choose all that apply
- Line of Credit
- Taking out your own retirement funds early
- Crowdfunding
- Personal loans
- Maxing out the equity in your own home
- 0% APR credit cards for materials
- Your kids college funds
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Question 14 of 20

14. Question
TRUE or FALSE – Portfolio Lenders are local and an alternative resource for real estate investment loans
- TRUE – You can develop relationships with the commercial department to get investment loans and work more personally alongside a local bank/credit union
- FALSE – Credit Unions and smaller banks don't work with or lend to real estate investors because it's too risky and not worth it to them
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Question 15 of 20

15. Question
TRUE OR FALSE – It’s not worth giving up 50% or more of a deal in equity to a partner because it’s a lot of profit to lose to someone
- TRUE – You need to pass on the deal or find another way to get the funds on your own so you make as much as possible
- FALSE – It's a way for you to get your first deals done and earn 50%* of a deal with less risk and the lender may even help teach you as well
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Question 16 of 20

16. Question
How important are your personal finances when it comes to flips? Choose the right answer
- It depends on the lender, but the stronger your financials, the more it could help get access to better lending programs, rates and terms
- It doesn't matter at all because the programs are just based on the strength of the deal. If you buy deep enough, then they don't ever care.
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Question 17 of 20

17. Question
What do your lenders think of you on your first few flips? Choose all that apply
- That you have a 700+ credit score
- They want to know they'll get their money back
- You're a big gamble
- That your rehab looks more designer than expected
- That you have some skin in the game somewhere
- That they want to see you perform and be professional
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Question 18 of 20

18. Question
TRUE or FALSE – Getting funding may be clunky and expensive at first but gets easier the more deals you do
- TRUE – Once I have a track record, it gets easier
- FALSE – It's always awkward to ask for money and lenders don't like flips
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Question 19 of 20

19. Question
If you have a really discounted deal, it’s still really hard to get funded / partnered up because you’re brand new and no one will want to help you out yet
- TRUE – You are a big risk when you're brand new no matter how good the deal is
- FALSE – Many investors would be happy to fund/buy/partner on a juicy deal and don't care who or where it comes from
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Question 20 of 20

20. Question
Open Answer Question – What stood out to you that you learned in this section?
- This response will be awarded full points automatically, but it will be reviewed and possibly adjusted after submission.
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