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37: Hard Money Lenders – What You Need To Know

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Chris Jameson helps us learn the ins and outs of using hard money to fund our house flipping.

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Chris Jameson started investing in the San Antonio real estate market in 2011 and soon after entered the private financing market. He has facilitated over $60M in loans and acquired over 60 units for his personal portfolio.

In this episode, Chris and I talk about the ins and outs of hard money loans and how to work with hard money lenders.

One of the biggest benefits for new investors is that hard money lenders can help keep you out of trouble. They usually won’t lend if the deals isn’t likely to make you money.

There are some hard money lenders that Chris calls “Loan To Own”. These lenders are more interested in creating the loan with the intention of getting the house from you when you default on the loan… usually after it’s already partially or mostly rehabbed!

Check out the show notes page at to download Chris’s hard money lender checklist, hard money lending exposed pdf, repair estimates guide and his contact information.

In this episode we answer all of the following questions and more.

  • What exactly is a hard money lender?
  • Why are they better than getting traditional financing?
  • What characterizes a “good” hard money lender?
  • What is typically required from a borrower for a loan?
  • What kinds of deals and/or how do you analyze whether you will lend on a given deal?
  • What is the process from start to finish for someone wanting to get a loan for the first time?
  • You guys loan throughout Texas right? For people outside of Texas, how would you suggest they find a “good” lender?
  • Do you have any interesting stories about deals or borrowers that you wouldn’t mind sharing?

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Hard Money Lender Checklist and Hard Money Lender Exposed Guide

play podcast icon Recommended Books

Rich Dad Poor Dad

Blue Ocean Strategy

The Opposite of Spoiled

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Danny Johnson: This is the Flipping Junkie podcast episode 37. [music] Welcome to the Flipping Junkie podcast. My name is Danny Johnson; former software developer turned house flipper, flipping hundreds of houses. Each week, we bring you interviews, strategies, stories, and motivation to help you get started flipping houses and on your way to becoming your own boss and achieving financial freedom. Thanks for spending time with me today. Now, let’s get to it.

I hope you had a great week. We’ve got another great podcast episode here for you on the Flipping Junkie podcast. Of course, we’re in the middle of this series of podcasts that will probably span over a year, I think, with basically going from the beginning of foundation mindset working through how to find deals, how to analyze deals and put the deals together, all that kind of stuff. Right now, we’re currently in the funding part of it where we’ve talked to some people about setting up joint ventures and using private money and things like that. Today we’re going to be talking about hard money. And I’ve got a friend, Chris Jameson, on the podcast and we’re going to talk about hard money lenders, what you need to know. That’s the topic for this week, it’s going to be a great episode.

Just a little about Chris. He started investing in San Antonio real estate market back in 2011 and he soon after entered into the private financing market. He has facilitated over $60 million in loans and has acquired over 60 units for his personal portfolio. So he knows what he’s talking about when it comes to lending and hard money lending. So this promises to be a great episode. Thank you for listening to the podcast. I know you’ve got several options so I do really personally appreciate you listening to this one. I’ve been getting a lot of emails and things from people talking about how much they’re enjoying this series in the podcast, so thank you very much for all those. And for all the people leaving great reviews on iTunes, very, very much appreciate it. Really helps out and makes it worthwhile to know that I’m reaching people and helping people get started and to improve their house flipping businesses. So, thank you very much for that.

Just a little promotional message here for our Lead Propeller real estate investor websites. Check out These websites are based on all the experience that I’ve had actually flipping houses over the last, what, it’s been 13 years now and generating thousands of leads online. Of course, I’m an active house flipper. We’re looking at trying to do 100 flips this year, so we’re very active investors. Not just saying that we’ve flipped in the past and stuff like that. We’re active investors and use these websites to generate leads for our business, and the majority of our leads do come from our websites still. So I’m generating about 75% of my leads do come from my real estate investor website and you can have one just like it. You can set up and choose your template and edit it very simply from our custom editor that we’ve built within Lead Propeller. These sites are set up for conversion, so we’ve done a lot of testing. We’ve done a lot of playing around with what works and what doesn’t and the best messages to use, all that kind of stuff. So you’re getting a lot of experience and years of experience generating leads online in those websites. So check out And here we go with the episode. Thanks for listening. [music]

All right. Chris, thanks for joining us on the podcast.

Chris Jameson: Yeah. Thanks for having me, Danny.

Danny Johnson: Great. So you’re staying dry, we’ve had so much rain in Texas over this last –

Chris Jameson: Yeah, it’s been pretty bad up here as well, so I think San Antonio, I’m up here in Dallas, it’s been pretty hard over the past week. So, trying to stay dry.

Danny Johnson: Yeah. It sounds like Houston is getting the worst though. I think they’ve got the most flooding out there.

Chris Jameson: Yeah. It’s pretty bad out there.

Danny Johnson: So for people listening, do you want to give a little bit of background about yourself and your real estate background?

Chris Jameson: Yeah, sure. My story kind of started when I was a junior in college and I was deployed to go to Iraq. I was in the Navy Reserves. On my deployment, someone recommended that I read Rich Dad Poor Dad. So I read that book and this was Spring 2008, so I read that book and started to see the clash of the market. I saw a lot of people overseas that were losing their pensions, retirement funds. Everything was just going up in flames. I started reading a bunch of other books to kind of be educated on real estate. I thought that was a good strategy to get into. So did a lot of the Rich Dad stuff, ended up going back to college. I bought my first two houses when I was a senior in college. Finished and then went and spent a year in Afghanistan. When I was in Afghanistan, my wife got stationed in San Antonio. She was in the Air Force. So I knew that San Antonio was where I was going to go back to and so I’m going to start investing in San Antonio. So in my downtime overseas, I spent a lot of time researching acquisitions and how to find properties, buy properties, financing, all that kind of stuff. Believe it or not, I took a lot of notes off of your blog, Flipping Junkie. I think I still have a legal pad that’s full of scribbles and notes from front to back on everything from driving for dollars and finding properties and overgrown grass and red flags and all kinds of stuff. A lot of informative material that you had on the blog. It was really, really great for me because going back, I wanted to buy direct, I want to go straight into real estate investing, acquisitions and really hit the ground running. That blog was very helpful for me.

So I went back to San Antonio. The on piece I didn’t have was financing. I didn’t understand financing. So I started in the hard money lending business in 2011 when I got back from Afghanistan. At the same time, I started buying houses. So I bought owner financed, I sold owner financed. I’ve done flips, I’ve done rentals, wholesale deals, apartment (I had one apartment deal), done transactional funding assignments, double closes, triple closes that I bought with cash, hard money, private money, and even partners.

Danny Johnson: Wow. So you’ve pretty much gone through everything really in the years that you’ve been doing it.

Chris Jameson: Yeah. It’s been about 5 years and what I enjoy the most right now in this market is probably buying houses, buying properties and then doing hard money lending. Like you mentioned, I think in the beginning I’ve facilitated $60 million in hard money loans and I’ve bought 60 units for my personal portfolio. So buying properties and doing hard money loans is what I’m specializing in right now.

Danny Johnson: Awesome. So let’s just get right into to talk about hard money lending and for any new people out there maybe that just have a rough idea of what it is, you want to explain a little bit more of what a hard money lender actually is.

Chris Jameson: Yeah. So hard money lender is mostly asset based. It’s not hard to get. A hard money loan is a loan and a hard asset, so that’s, you know, the term “hard.” It’s a short-term, high risk, high cost loan. So typically it’s too risky for traditional banks and it’s short-term. People that are buying distressed properties that need to be rehabbed or they have to close quick is essentially when you use hard money. So to offset the risk of being a distressed property, there’s higher fees involved. It can be extremely beneficial if used correctly because it is a fast process, it’s easy. You can mix stronger offers because you can close quicker. You can buy wholesale deals because most of those timeframes are 7 to 10 day closing. And hard money lenders are a reliable source of a lot of money. So unless you’ve got private lenders out there that have $5 million, $10 million, $15 million pockets, time in a hard money lender could be beneficial to you.

Danny Johnson: Right, absolutely. I guess that’s what pretty much makes it better than trying to get traditional financing. Some people looking to get in flipping and thinking, “Well, I need to buy a house so I better go and go to a bank and see if I can scrape together enough for down payment and see if they’ll fund the deal and have to jump through all the hoops of appraisals and everything else.” So what else makes hard money lending better than sort of that traditional route?

Chris Jameson: So the biggest thing is just the speed of transaction. You can close with a hard money loan – we’ve done it in a matter of 1-2 days before. You just can’t do that with traditional financing. Most of the time conventional financing, you have 30 to 45 days and that’s if a property is not highly distressed. You know, foundation, roof, mechanical, structural problems like that won’t even qualify for traditional financing.

Danny Johnson: Right. What kinds of things do you guys typically – and I’m going to say you guys because, you know, if that’s a little bit different than maybe what you’ve heard from most other hard money lenders, maybe you can talk about that. But what do you guys typically require from a borrower for a loan? So if somebody’s got a house under contract, it’s their first deal they’ve ever done, they’ve got it under contract for a good price and they bring it to you, what’s the sort of process for that?

Chris Jameson: It all depends on the active strategy. We want to make sure that people can get out of our loans before they even get in them. So if you’re going to flip a property, we want to make sure that you have adequate reserves. So you close on a property, you have holding costs and your worst case scenario if something comes up on the backend and, say, for example you’ve got to put a new roof on it prior to selling it, you want to make sure you have all those funds to be able to get out of the deal before you get in it.

Danny Johnson: That’s great to know because I’ve heard of cases where people have gotten a loan and even for just like six months I think and didn’t borrow enough, didn’t have any reserves and things came up and the property didn’t sell in time and then ended up losing all of their hard work to the lender who ended up getting the rehabbed property.

Chris Jameson: Yeah. Money lenders are a dime a dozen. There’s so many people trying to get into the industry, people that are using lines of credit anywhere from 50,000 to 100,000. People are using credit cards to try to be hard money lenders. People are brokering loans, using hard money. There’s so many people that are trying to get into it. Really working with a hard money lender that knows what they’re doing and have the track record and actually has the funds to close is going to be very important. So it’s easy to get a loan. One of my mentors tells me this all the time: easy to buy. You can buy anything. It’s easy to buy. It’s hard to buy right and to execute. So we don’t have a problem turning down loans. In fact, I think last week we turned down one where they’re going to lose money. They thought the value was higher, they underbid the rehab and they were going to lose money on the deal so we turned them down. They went to another lender and the lender knew that they’re going to lose money but the lender’s always in a good position because they’re loaning 70%.

Danny Johnson: Yeah, that’s a great point especially for new people, I think. Because having somebody like yourself that will sort of guide them, it’s almost a little bit of a coaching to say “Hey, we wouldn’t lend on this because we wouldn’t do this deal ourselves and maybe you shouldn’t.” Because if somebody’s new, sometimes they’re tempted to do a deal that’s really thin and they’re very optimistic and you can help sort of show them the reality of the situation based on your experience in the business.

Chris Jameson: Yeah. In this market, the wholesalers happen to pay more to acquire properties so they’re selling for more. There’s higher demand so prices are going up, margins are going down. If you’re buying properties 80 to 85 cents on the dollar, you’re heightened to break even. You have to make sure that you buy right. We analyze deals and run comps. We’re not loan-to-own and we’re very experienced in what we do. So our best interest is making sure that the borrower has a successful transaction so they can come back and do it again because we make money on our fees.

Danny Johnson: Wow, I like. You quickly in there said “We’re not loan-to-own.” I hadn’t heard that before, I really like that. I guess that’s the terminology for lending with the expectation to get the property back. Is that right?

Chris Jameson: Right.

Danny Johnson: Yeah, okay. So back to maybe a situation where John has a house under contract that he’s going to flip so he plans to flip this house, he’s going to spend two months on a rehab and put it up for sale with an agent and get it sold. What’s the process? If he gives you call, where does it start and what’s the conversation?

Chris Jameson: So first is talk to John, get exactly what he says, make sure it’s a real deal that it’s good, that he’s going to make money on it. We’ll get the loan application, we’ll run credit. We’re not credit-based, it’s asset-based but we need to verify some things in the credit history like not having 12 late mortgage payments, something like that. We need to get a detailed rehab bid then we’ll need property insurance, have contact information to set up the closing, and two months of bank statements.

Danny Johnson: All right. And the bank statements are for if John has an entity or just for John himself.

Chris Jameson: Either. You can do either personal or an entity. We want to see the bank statements for liquidity, again, to make sure that he has enough money to close into the deal, to get through the deal and get out of the deal worst case scenario.

Danny Johnson: Okay. Is there a certain that you’re looking for or is it based on sort of the amount that you’re loaning? So if he’s getting maybe an $80,000 loan, is there a certain number you’re looking for in those bank statements?

Chris Jameson: In this market it’s going to depend on how well you buy. So, say, you’re buying right at 70%, then your purchase plus your rehab is 70% of the after repair value, the ARV, we will look for 10,000 to 15,000 in reserves in that situation. And then the higher you get in your all-in cost would be the more funds that we require to see prior to closing. So in this market it’s typically about 20,000.

Danny Johnson: Okay. And it makes sense. If you’re going to get into rehabbing, it’s smart to have that money. So if you say, “Well, I don’t have that money but I want to rehab,” you better make sure that your numbers are spot on and that you can handle the rehab and get it done without losing money because there’s a real problem with people that don’t understand how much actually that rehab is costing them per day and if you don’t know what the number is, you can be surprised after six months, and after 6% realtor commission selling plus closing cost assistance, etc. for your buyer, you can find out that what you thought was a $15,000 profit at the end turns into an expensive $5,000 or something.

Chris Jameson: Right. Yeah. You have to make sure you understand the true cost of the deal. I think maybe once ever, rehab has came in underbudget out of all the loans that we’ve done. So making sure you have a good accurate budget is important and then also understanding your true holding cost, your true buying cost and your true selling cost so you can really determine what your profit is going to be.

Danny Johnson: Great. So when they bring in that detailed rehab estimate, I’m assuming they’re getting that from a contractor. Is that right?

Chris Jameson: Yeah. Most of the time. We also have a rehab sheet that we can provide that kind of breaks down X square footage for flooring at 350 a square foot for tiles, something like that. It kind of breaks down in two pages, interior and exterior. So it doesn’t necessarily have to be from a contractor. We do require a foundation estimate from a foundation company if there is foundation work. But yeah, it can either be a GC bid or something you put together as long as it’s detailed.

Danny Johnson: Would you mind sharing that repair estimate sheet?

Chris Jameson: Yeah, I’ll send that over.

Danny Johnson: I’ll provide that on the show notes page for people at Flipping I really appreciate that because that helps people get an idea too of cost of rehabs.

Chris Jameson: This one is a rehab sheet that I put together when I was buying in San Antonio and I was summing out all the works. I would run my crews and do my estimates based on this when I was buying direct from sellers.

Danny Johnson: Awesome. So if they bring that in, they’ve got the estimate, do you ever go out and actually need to look at the property? What’s the process there?

Chris Jameson: So we do an appraisal. We do third-party appraisals. We don’t do anything in-house. We want to make sure that their value really is what the value is. It’s not something that’s inflated or pushed to get a deal done. So there’s not necessarily an inspection but we just do an appraisal to make sure we get the pictures, the true comps, the accurate measurement of the square footage, everything like that.

Danny Johnson: All right, great. That saves time too I guess and hassle of trying to schedule especially if there’s somebody living in the house, the owner is still living there or something.

Chris Jameson: Right.

Danny Johnson: So how does this work for somebody that maybe they’ve done a loan with you, it worked out great and they’re doing a second one. Is there anything that sort of speeds up the process over time when you’ve done several deals with somebody?

Chris Jameson: Yeah. You just have to fill out the application once and they’ll send an updated bank statement and that’s pretty much it. The contract that you have to buy the property, the rehab bid, and in the same process So a lot of people use the same insurance companies so it’s easy communicating back and forth to get the insurance policy. A lot of people use the same title company so we’re used to working with several down in San Antonio and Dallas and other markets. So it speeds up the process because a lot of it is just familiar, so a lot of the same things are done over time. We put a lot of work into our infrastructure, technology and processes. So a lot of things are done automatically through email, kind of speeds up the process as well.

Danny Johnson: Great, great. I wanted to go back. I meant to bring this up before. We were talking about sort of the benefits of a hard money lender and the first thing we talked about with regards to that was just someone sort of experienced watching out for you who knew you were in this business and telling you like that’s not a good deal, that is a good deal. How do you analyze these deals?> What are the ones that you’re looking for? Is it always the 70% or do you guys have other criteria that you use for certain properties?

Chris Jameson: So again, depending on the exit strategy, it’s going to depend on the price point as well. So you can make money on a 80% deal if you’re doing a $300,000 flip. If it goes to 80% deal on $100,000 property, your fixed cost are just going to be so high it’s going to eat up most of your profit. Then for rental properties, we do a lot of loans for people that acquire properties, use a hard money loan to stabilize it and fix it up and then go and turn it into a rental property, refinance out into a 30-year mortgage. So those people are willing to pay 80 to 85 percent in some cases because they’re buying for cash flow, not for quick profit.

Danny Johnson: What are the other benefits to people? So actually you had said that you have title companies and things like that that you guys have worked with and I’m sure a lot of repeat business through them. So if somebody’s new in this business, is it another thing that you guys would provide as sort of guidance with where to close properties, who to close with and different things like that?

Chris Jameson: Yeah, people that are familiar with working with investors both on the title company side, the insurance side. We work with a lot of local wholesalers as well that bring deals so we’re analyzing a lot of that stuff as they’re sent out either pocket listings or email blasts. We work a lot with those guys so we can help bring wholesale deals to our borrowers. We won’t increase fees, we don’t do anything. We don’t add in any kind of profit from the wholesaler to the borrower. Essentially, we’re just trying to connect the dots. Going back to what I said before, we’re just trying to create a good customer experience so that that borrower will come back and do business again.

Danny Johnson: That’s a great point of view to have, is this like somebody else on your team that even could bring you deals, I mean, that’s awesome. I mean, bring you deals and then if they’re bringing you the deal obviously they’re already interested in lending on it, right?

Chris Jameson: Yeah, exactly.

Danny Johnson: I mean, that’s pretty cool. So if you see it coming from them, they’re experienced. Like Chris is not a loan-to-own so when you get stuff like that coming through, you can count on it being a pretty good deal. Obviously, people can make mistakes and a lot of it is on how you execute. But if they’re bringing it to you, they know that they would be able to do well with it and you should be able to if you are focused on doing the right thing with the rehabs. So you guys loan throughout Texas for now. Are you going to be expanding?

Chris Jameson: Yeah. So for now, we’re doing everything in Texas. We’re debating on either getting more aggressive in the markets that we’re expanding in or expanding outside of Texas. We’re kind of going back and forth on that right now. There’s still a lot to capture I think within Texas and like I said before, as well there’s a lot of people trying to get into the market as hard money lenders. So us relying on our technology and speed of transaction, I think when the market does turn, we’ll be in a situation that we can capture all of the little guys that have tried to get into the business. We can capture that market as well. So we’re kind of right at the junction where we are going to stay in Texas and specialize more and go after more market share or expand into other markets.

Danny Johnson: All right. So for people listening – because I do have, you know, the majority of listeners are actually outside of Texas – do you have any advice on what they should do to find some good hard money lenders?

Chris Jameson: My advice, just personally, as an investor is to find someone local with a good track record. Reach out to people that have used that lender before. Get involved with your local groups, REIAs, mentor groups, things like that. And some questions you want to ask or find out about the hard money lender, if it’s a loan-to-own thing. You want to know their experience, how many deals that they’ve done. You really want to understand the draw process because some lenders will be very controlling in that aspect and maybe only allow 1 or 2 draws. So, hidden fees. A lot of people, they’re out there shopping. Ask what are your points and what is your rate. So hard money is a very competitive business. Rates float between 12 to 14 percent for the most part and points are 2 to 4. So what people don’t ask is what are your other fees. A lot of times hard money lenders will throw in junk fees that make that loan 14 and 4, 14 and 5 in some markets. So, not understanding what the hidden fees are, the junk fees and penalties, I think it’s something a lot of people don’t ask especially new people.

Then the other thing is asking if they charge money on escrow funds. What that means is, say, you’ve got 25,000 that you’re using for rehab and that money is set aside in escrow at closing. If they are charging on that $25,000, it’s like them borrowing your money, charging you interest on it and in most of the time they’re loaning that out to another investor at 12 to 14 percent. So they’re charging 12 to 14 percent on your money that you haven’t used and then they’re charging someone else 12 to 14 percent using your money.

Danny Johnson: So you want to make sure that if they’re withholding rehab funds in escrow, that they’re not charging you interest for that amount.

Chris Jameson: Yeah. Because that can be $30 to $600 a month during that rehab process.

Danny Johnson: That’s awesome. So any other tips of questions or things to find out that maybe a lot of people aren’t aware of that they should be asking?

Chris Jameson: Pre-payment penalties. A lot of lenders often right now have pre-payment penalties. So 3 months, 6 months, they’ll charge you a point or two if you exit out of loan too fast. A lot of institutional lenders have that as well because they want their money to sit there and earn interest for a long period of time. So if it doesn’t go as long as they would like, they’re going to penalize you for being too fast. Yeah, then the loan to value. So plenty of lenders will do 70%, different markets might be 60 to 65. In Texas, most of them do 70%. You want to make sure and ask if they require any kind of down payment. You know, 10% X dollars, anything like that. Because hard money really is made to minimize out of pocket. So if you’re buying right, we do several loans a month where people are bringing less than $5,000 closing payable and making $20,000 to $25,000 when they sell the property. They’re making 500% returns as long as they’re buying right.

Danny Johnson: That’s awesome. What about loan extensions? Do you guys typically have where maybe a point for like 6 months extension or anything like that? What about extensions?

Chris Jameson: Yeah. So we do 12-month term. And there’s a point to extend after that first year. It’s a point every 3 months. As long as there’s communication. For example, if you bought a house, you rehabbed it with minimal work. It’s overpriced and it’s been sitting on the market for nine months and you haven’t been communicating or maybe your payments are coming in just a little bit late every month. There’s not an intention for us to continue to let that property sit. You’re not price dropping, you’re not trying to sell it. That might be a situation where we don’t extend. So really, that’s our failure upfront to not educate and help people along the way. We haven’t had that process, we haven’t had that situation come up yet. So for the most part, we’re spending half of the 12-month period but really, our job is to make sure that you get in and get out as fast as possible. Again, you make money faster. Time is money. You can come back, find another deal, we’ll make our points, you make more money when you sell it. Continue to do that process. We don’t want to have someone out there that has a loan for two years. That doesn’t help anybody.

Danny Johnson: The way the market has been in most of the country, lately it’s kind of strange to have a property that you would have for over 12 months. I mean, what are you finding in Texas with you guys where you’re lending the typical time frame for these loans?

Chris Jameson: Our average right now is about 4 months. So that’s from close to close. Either buy and flip or buy and rebuy. So buy and rebuy is a little bit faster. It’s probably 2 to 3. Then flipping is probably 3 to 5.

Danny Johnson: That shows the strength of things. Have you noticed that holding steady or being a little bit longer? Do you see any change in that lately?

Chris Jameson: No. For the most part, it’s been pretty consistent. I think the biggest factor that changes that is the size of the rehab. So most of the time if you’ve got mostly cosmetic, maybe a little bit of foundation work, you’re looking at about a 20,000 to 30,000 rehab, most of the time you can get that done in about 4 to 6 weeks so you close 6-week rehab, list it. Most everything, at least in Dallas right now and a lot in San Antonio is if it’s done correctly, they’re selling within the first 10 days. Then the next 30 to 45 days, they close. So most of the time we’re still successful people that know what they’re doing. Nothing major comes up on a rehab, they’re closing flips in 3 to 4 months. I think the last one we did up here in Dallas personally, we closed in 47 days, from close to close.

Danny Johnson: Nice. So do you find you get any pushback from people maybe that price it a little bit high and it’s not selling like that within that first 10 days? Do you try to advise them on “hey, maybe it’s priced a little bit too high” if you haven’t received any offers, that kind of thing.

Chris Jameson: Yeah. I’m going to that situation right now with one borrower. I think they listed it significantly higher than market and then had the drastic price drop. That’s going to put red flags to everybody that something’s wrong with the property. So list it $50,000 higher than the market value and then drop $50,000, people will think that something’s wrong with it. So overpricing it can be detrimental to your flipping business.

Danny Johnson: Definitely. Because I know that temptation is there. Like you do a great job with rehab and you’re thinking, “Wow, I bet I could get 10,000 more than I thought.” You’re sort of attached to it a little bit and that thing can be tempting. But you said you don’t really see that that often, right?

Chris Jameson: Yeah. Most of the time when that happens, it’s because what you just mentioned or rehab went overbudget 10,000 so they think they can make that up on the backside. Most of the time it doesn’t quite work out that way. But thankfully we’re in a seller’s market and prices are selling for a little above this price most of the time.

Danny Johnson: What about level of rehab? Do you find that you’re ever having to coach people on sort of not over rehabbing properties?

Chris Jameson: Yeah, correct. Not under rehabbing or over rehabbing. Most of the time you want to be comparable with what’s common in this specific subdivision. So we run comps and kind of get an idea of what is selling at the top of the market in a subdivision, what’s kind of rental craze, what you can get away with to not over rehab it. A lot of people just watch too much HGTV and think they can just move walls and move bathrooms and keep everything within budget. Realistically, a lot of times, in Texas it’s just not necessary.

Danny Johnson: Right. You might be amazed sometimes if you run comps and look at neighborhoods, what other houses are for sale. It’s not that hard to outdo them and you don’t have to go crazy like you said. You don’t go in there and build a bunch of built-ins and do the beam ceilings, all that kind of stuff. It’s just good for TV but most of the price ranges investors work in, that doesn’t make a whole lot of sense.

Chris Jameson: Right. It’s good for entertainment, it’s good to see someone else do it. But trying to hang a little bit with the TV formats, you know, a lot of people believe that these numbers they see on TV are real when they’re doing gross process and not factoring in any kind of buying cost, holding cost and minimal selling cost. So I’ve got a calculator that I put together to kind of detail everything all the way from holding cost to maintaining the yard, utilities, selling cost, inspection repairs, home warranty. It goes down pretty detailed so you can really get a good idea of what those true costs are going to be so you can see your true process.

Danny Johnson: Awesome. Where can people find that? Is that something we can put on the link on the show notes page for?

Chris Jameson: Yup, I’ll send that to you as well.

Danny Johnson: Awesome. So you’ve got that and you also sent me some other things. It’s really awesome. Chris really cares about helping people with information and getting some stuff out there. Another thing that he sent to me was a hard money lender checklist and that has different items to run down for the process here, so he’s got to get prequalified offer accepted, loan processing needs, loan underwriting process, draw request, inspection process. Very detailed. So I’ll definitely make that available also on the show notes page at Then you have a Hard Money Lending Exposed PDF here. You want to explain what that has on it?

Chris Jameson: Yeah. So these are just common questions to ask the hard money lender regardless of what market you’re in. These are things that I mentioned before like charging interest on escrow funds, experience level, if they’re buying personally or not, hidden fees, things like that just to have awareness. Especially people that are new, it’s kind of a lack of information. They make buying decisions and borrowing decisions with a lack of information. So understanding exactly what they’re dealing is advantageous. Putting this up together, it’s a quick read, really good. Just to know what you’re getting yourself into because this is a very competitive market right now. Like I said, margins are getting smaller so reading the fine print and knowing what you’re getting yourself into before we make that decision, because these are hundreds of thousands of dollars’ worth of assets and liabilities that you’re responsible for. So I’m just trying to do what I can to help people not lose money. I have never lost money on a deal myself, I want to make sure other people don’t.

Danny Johnson: Awesome. So people, you can find and download those on I wanted to also ask you because being that you’ve been in the business for a while and probably have seen quite a few things, do you have any interesting stories about deals or borrowers that you wouldn’t mind sharing with us?

Chris Jameson: Interesting story?

Danny Johnson: Yeah.

Chris Jameson: Huh.

Danny Johnson: I probably should have let you know I was going to ask that beforehand. It’s always kind of hard.

Chris Jameson: There has been several. Interesting. Let’s see. So I guess one deal personally, going into… it was a historic downtown San Antonio property that going into the deal was absolutely fantastic. It was a 1910 house, traditional, historical, great-looking house, a lot of potential. So we’re looking like 375-400 ARV. In San Antonio, that can buy you a lot. A lot meaning a big house especially some areas of downtown. So this was in Malacca. Going into it and everything looked great, numbers were fantastic. We get into it, the rehab was scored at 120. We factored in 6 months for holding cost. It looked like we were going to make a six-figure profit on it. So we missed things on rehab. Real tough walls, things changed, things get added, inspection permits, all that kind of stuff. Long story short –

Danny Johnson: Can I guess how much it went?

Chris Jameson: Yes, it’s a 12 months process or just shy of 12 months. At that time we were using hard money lenders that did 6 months loan with a point extension every 3 months. So our holding cost went through the roof. Our rehab went from 120 to 180. And this amazing-looking marble floor, hardwood floors, custom surround, custom cabinets, fantastic-looking house ended up making $4,000.

Danny Johnson: Oh, no! That’s hard.

Chris Jameson: So my advice would be stick to easy, simpler type of rehabs and try to stay within 25% of the median sales price in your area. So in San Antonio I think the median sales price is like 200, so try to stay between 150 and 250 on your ARV.

Danny Johnson: Right. It’s always shocking to hear that for San Antonio. Even 200 is shocking to me because I remember the days of 145-165 being the median.

Chris Jameson: Yeah. That’s about what it was when you started buying in 2010-2011.

Danny Johnson: Right. It’s crazy how things go up. Well, awesome. Yeah, that was an interesting story. I’ve been there before and I think we have one deal where I thought I was going to make 90,000. And I really hate it because it’s one of those things where you know you could have wholesaled it or even sold it maybe as is to someone to live in and made 50k and we thought “Well, we’ll make 90. We’ll go and rehab stuff.” Then we ended pretty much breaking even I think is what it was on that one. But yeah, it’s painful when you know that you could have avoided all the hassle and work and made so much more.

Chris Jameson: A motto we live by right now is “A fast nickel is better than a slow dime.” If you’re going to wholesale something and you can make 5,000, it’s better than going through a deal and making 10,000.

Danny Johnson: Right. Absolutely. You’re going to take that money, turn it around and get more deals with it.

Chris Jameson: Yeah.

Danny Johnson: So do you have any books that you recommend? You mentioned that you first read Rich Dad Poor Dad. Is there anything else maybe that you’ve read recently or anything that the audience would enjoy reading?

Chris Jameson: Yeah. So I’ve read Blue Ocean Strategy, it’s something I’m reading right now for business. That essentially is creating a niche in the market where there’s less competition. Red Ocean is full of sharks, they’re eating all the fist, a lot of competitors. Finding a Blue Ocean Strategy would be less competitors, tons of open space, a lot of potential clients and customers for developing something to get into that blue ocean space. I listen to a lot of podcasts. I do like Tony Robbins, Flipping Junkie, Bigger Pockets – things like that have been very helpful. Then my next book is The Opposite of Spoiled which is I’ve got one son who’s almost one and another one is on the way, so the opposite of spoiled is kind of techniques on how to not raise spoiled and privileged kids.

Danny Johnson: Oh, nice. I probably should get that. Although my kids aren’t spoiled, I probably should still get it and read it to make sure that they don’t end up spoiled. But yeah, awesome. Thanks for those. It’s good to hear some new ones. I think I had heard of Blue Ocean Strategy before but I don’t think I’ve read it, so I’ll have to get that and then the opposite of spoiled. I’ll put links to those on the show notes page as well. But thanks a lot for your time, Chris. I know you’re busy and I really do appreciate you sharing all your knowledge and information to the listeners out there of the Flipping Junkie podcast.

Chris Jameson: Yeah. Thanks, Danny. It’s a great opportunity. Glad to be on the podcast and I look forward to helping people that are listening.

Danny Johnson: How can people contact you? What’s a good way for people to reach you with questions or wanting to look at getting some loans and things like that?

Chris Jameson: You can email me directly. My email is [email protected]. Or you can call (210) 853-5777. That’s (210) 853-5777.

Danny Johnson: (210) 853… it was 853 and then what was the last four?

Chris Jameson: 5777.

Danny Johnson: I’ll make sure to have the link to your website and the phone number also on the show notes page at Well, awesome. I really do appreciate it and we’ll talk soon.

Chris Jameson: Thanks, Danny.

Danny Johnson: Another great episode of the Flipping Junkie podcast. Thank you, Chris for all of the great information. For everybody, you can get his contact info and all of the cool documents and things, the checklist, the repair estimate stuff on the show notes page at and you can get all of that info and show notes breakdown from the show. Have a great week and we’ll talk to you next week.


Comments (4)

  • Richard Alex

    Very informative.

    • Danny Johnson


  • Shawn McClelland

    On the podcast you mentioned that Chris had a calculator. Where is the link for that?



    • Danny Johnson


      There is a link under the Download the Guides section. Once you click there it will ask for an email and it will send the spreadsheet calculator in your email with the guides and checklist.

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