Pelorus Equity Group – Hard Money Lender for Residential Rehab & Construction Loans

– Hi, I’m Rocky Butani
from Private Lender Link. I’d like to introduce you to Pelorus Equity Group, a hard money lender that specializes in residential rehab fix and flip and ground-up construction loans. And I went down to their office in Laguna Hills, California. I met with one of their
principals, Rob Sechrist, and asked him to talk about
their lending guidelines, their loan process, their
pricing, and much more. – Hi, I’m Rob Sechrist
with Pelorus Equity Group. I am co-founding partner
and vice president. We are here in Laguna Hills, California. And we lend construction
and rehab loans throughout California and some of the
western regional states. About 95% of all the loans that we do are single family residence, or up to four units,
rehab or construction. Of all those loans I’d
say that 75% are rehab as opposed to ground-up construction. Regarding loan amounts, currently we’re capped at 2.5 million when we’re lending on a
completed value project, and that’s just because
of compliance reasons but we’ll have a CFL license in place within the next 30 days, and that’ll allow us to go past that, and we’ll probably cap it at around five million for any one loan amount, and our minimum is $100,000. We’re currently licensed in California and we have the ability to go into the western regional states. We have a fund that
we’re launching as well, and we’re getting prepared
for the licensing to expand into Texas and into some
other states as well. But as of today it’s just
currently in California is where we’re currently lending. In regards to loan-to-cost, we consider cost everything
that goes into the loan, not just the purchase price or the budget. So that would be your title
insurance, your origination. Anything that comes from
proceeds of the loan, we consider that cost. And of that we will go up to 75% is our requirement of what
our loan-to-cost would be. We’ll lend up to as
high as 65% and even 70% in rare circumstances
of the completed value, and we’ll start adjusting
those amounts of money that’s necessary to come in, from 25% down to 20% and even 15%, and 10% in some circumstances when the borrower has the
proven experience and liquidity, and the other offsetting
factors for us to consider reducing that skin in the game
that we typically require. For our cost, typically most origination is 2 1/2 points starting from there, and our pricing is starting
from as low as 8% for the most experienced borrowers
to as high as 10 1/2%. And the other cost that we
have is we have typically 17.50 to 27.50 of other junk fees that we may have for a transaction, and there are also third party costs which are for the fund control which is a percentage of the budget, and project oversight which
is for managing that process for making sure your
project is moving along so each one of those typically, the project oversight
one is typically as high as a half of a point based
on the budget amount. The fund control fee is
a different percentage depending on the size of the budget. So I think that the
minimum it is is like $1500 and it goes up from there but
it’s less than a half a point. It’s I think .25% or so. For doing business with Pelorus, we’re a smaller company,
we’re not a big shop, and you are able to speak
with one of the principals, myself or Dan, to get a
resolution to a problem. Typically in your first phone call we’re typically available, or an email within an hour or just a couple hours, we’ll get you a response. And one of the things with
working with us is that it’s not just a response but if it’s a problem that you’re having to work through, we’ll provide a solution. It may not be the solution
you are looking for but at least we’ll provide
something that is a solution that is something that’s available. We’re not in the business
of just saying no, and we’re not in the business of being your lending partner per se. We’re still just a lender but we’ll try to provide solutions that we could both work through when things change in the loan and they typically do.

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