EP 28 - How Private Lending Works for a Flip Project with Sherwin Dziwenka from Calvert Home Mortgage - CWHO - Commonwealth Home Ownership
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EP 28 – How Private Lending Works for a Flip Project with Sherwin Dziwenka from Calvert Home Mortgage

In this episode, we have Sherwin Dziwenka. Sherwin has been working as an Underwriter and Account Manager at Calvert Home Mortgage for close to 6 years and before that was a Mortgage Broker. He still holds his Mortgage Broker license and is also licensed as a Real Estate Agent. His experience at Calvert and the mortgage industry in general, has allowed him to help real estate investors maximize profit and assist individuals to access the equity in their homes for multiple reasons. 

Calvert specializes in financing that the banks and other institutional lenders prefer not to service, or are unable to service quickly. They have a very unique Flip Program that allows investors to do projects with very little down allowing them to get into projects they otherwise wouldn’t be able to or do multiple projects at once.

In this episode, we discuss different ways investors can take advantage of private lending, the ins and outs of private lending when it comes to doing a flip project, what private lenders will look at when you look to apply for financing, and the pitfalls to avoid when doing a flip project. 

If you’re looking to get into flipping houses or want to know more about how private lending can help you further your goals, this episode is for you!

Show Notes:

  • Calvert is a Mortgage Investment Corporation (MIC) that provides mortgages with a great product designed for fix-and-flip investors
  • Investors (shareholders) in Calvert cannot be a borrower so something to keep in mind
  • Calvert operates in Alberta and Ontario
  • Discusses different types of lending Calvert provides:
    • Equity take-out
    • Debt consolidation
    • Bridge loans
    • Construction loans
  • Interest-only loans
  • Loan to value is dependent on type of property, where the property is, and the strenth
  • As a private lender, they can be a great short-term solution to improve your credit situation for those who may not qualify with A-lenders
  • Can borrow as a corporation but will require a personal guarantee
  • 5 C’s of Credit:
    • Character – or credit worthiness; your credit score comes into play here.
    • Capacity – can someone repay the loan; you might have heard about debt-service ratios and this is where that comes into play
    • Collateral – this is the property itself
    • Capital – another word could be net worth; look at this to ensure that, in the case of the borrower losing their job, they still have the ability to cover the loan
    •  Conditions – or what is going on in the market; a good example is COVID – we analyze things like that to see the effects on the market and then adjust accordingly. Another good example could be industry legislation.
  • For flip projects, Calvert looks at the borrower’s ability to get to completion and get the renovations done
  • Once you can prove you can do one deal, it will be easier to access funds down the road
  • Know your renovation budget and plan
  • Have a plan to pay back the loan
  • Be mindful of interest on carrying costs when budgeting for a flip              
  • Check out Calvert’s Flip Calculator
  • Know your profit you want to make then work backwards to the purchase price
  • Goes over various pitfalls of doing Flip projects
  • Calvert gives an opinion of end values when applying for a flip project
  • Looking at factors that affect marketability
  • Discussed Calvert’s Flip Program in detail
    • Video would be useful here to see the example
  • Flip program particularly useful in a judicial sale
  • Good team members vital to a successful flip project
  • Sherwin’s Contact Info:

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