Hard money non QM loans offer fast property funding with flexible terms for fix-and-flip and rental projects. Understand costs, risks, and steps.

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Hard Money Non QM: Quick Funding for Property Goals

Hard Money Non QM: Fast Funding for Fix-and-Flip or Rental Plans

**Last updated:** May 2, 2024

 

## What is a Schedule Of Real Estate Owned?

 

A Schedule Of Real Estate Owned (SREO) is a document that real estate investors applying for a loan provide to lenders in order to communicate their current real estate holdings and real estate investing experience. We call this your "Track Record".

 

The SREO is typically a spreadsheet and we have provided you with OfferMarket Capital's Schedule Of Real Estate Owned template below.

 

## What information is included in a Schedule Of Real Estate Owned?

 

- Property Number
- Property Type
- Purchaser/Entity Name
- Street Address
- City State
- ZIP	
- Purchase Price
- Purchase Date	
- Renovation Budget
- Monthly Rent
- Occupancy Status
- Sale Price
- Sale Date
- Days Held

 

The *Sale Price*, *Sale Date* and *Days Held* are for properties that you have sold -- i.e. they were fix and flip or rental properties that you have since sold.

 

## Schedule Of Real Estate Owned Template

 

Here is OfferMarket Capital's [Schedule Of Real Estate Owned (SREO) template](https://docs.google.com/spreadsheets/d/e/2PACX-1vStfF-rbpUk1XQ5QtD0Te1MuUj2lH0kk7w2YbQKwqu0Xv_2wMSbp5S22CPKk_2V4T8ZMnlEwnUabWuZ/pubhtml?gid=1988909553&single=true).

 

## Schedule Of Real Estate Owned Excel Template

 

**To download the Schedule Of Real Estate Owned Excel template:**

 

1. Go to our [Schedule Of Real Estate Owned Template](https://docs.google.com/spreadsheets/d/1h03J85WTXxltIC7fqaLQ19hISiVPnW6LVkCq0aksAO0/edit?usp=sharing)
2. Click 'File' in the top left menu
3. Click 'Download' in the dropdown menu
4. Select 'Microsoft Excel (.xlsx)' from the list of options

 

## Schedule Of Real Estate Owned PDF Template

 

**To download the Schedule Of Real Estate Owned PDF template:**

 

1. Go to our [Schedule Of Real Estate Owned Template](https://docs.google.com/spreadsheets/d/1h03J85WTXxltIC7fqaLQ19hISiVPnW6LVkCq0aksAO0/edit?usp=sharing)
2. Click 'File' in the top left menu
3. Click 'Download' in the dropdown menu
4. Select 'PDF (.pdf)' from the list of options

 

## Related concepts

 

- [Collateral Desktop Analysis](https://www.offermarket.us/real-estate-glossary/collateral-desktop-analysis)
- [ISAOA/ATIMA](https://www.offermarket.us/real-estate-glossary/isaoa-atima)
- [Landlord Insurance](https://www.offermarket.us/real-estate-glossary/landlord-insurance)
- [USPAP](https://www.offermarket.us/real-estate-glossary/uspap)
- [DSCR Loan](https://www.offermarket.us/blog/dscr-loan)

SREO (Schedule Of Real Estate Owned) is a list of properties a borrower owns, submitted during the loan approval process for underwriting review.

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Schedule Of Real Estate Owned (SREO)

Schedule Of Real Estate Owned

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## What are Bad Boy Carve Outs?

 

**Bad Boy Carve Outs** are provisions in [non-recourse](https://www.offermarket.us/real-estate-glossary/non-recourse) [DSCR loans](https://www.offermarket.us/blog/dscr-loan-program) that protect the lender in the event members of the borrowing entity conduct themselves in an illegal or fraudulent manner. Bad boy carveouts allow the lender to hold one or more individuals of the borrowing entity personally liable for repayment of the loan.

 

## Examples that trigger Bad Boy Carveouts

 

Bad Boy Carve Outs can be triggered by several different violations of loan covenants, so it is important to read your loan docs carefully and consult your real estate attorney.

 

Examples include:

 

- taking on subordinate (i.e. 2nd position) financing without express written consent from the 1st position lender
- forged or fraudulent tax returns, bank statements, financial statements, operating documents (i.e. rent roll)
- illegal business conduct at the subject property 

 

## Non-Recourse DSCR Loans

 

Non-Recourse [DSCR Loans](https://www.offermarket.us/dscr-loan) are cash-flow based loans where personal guarantee is not required.

 

## Bad Boy Guaranty

 

Bad Boy Guaranties or Bad Boy Guarantees are the same concept as Bad Boy Carveouts.

 

## Are Bad Boy Carevouts Required?

 

Removing bad boy carveouts from your loan is unlikely and may depend on several factors:

 

- **securitization program guidelines and requirements**: if the lender will be selling the loan to an investor that will be securitizing the loan as part of a mortgage-backed security, then it is unlikely you would be able to remove the bad boy carve out.
- **quality of collateral**: if the collateral (subject property) is of high quality, the lender may be willing to accept the removal of a bad boy carveout, knowing that they will have an easier time recouping their loan through [foreclosure](https://www.offermarket.us/real-estate-glossary/foreclosure) or [pledge of shares](https://www.offermarket.us/real-estate-glossary/pledge-of-shares). 
- **pledge of equity**: if the lender's [pledge of shares agreement](https://www.offermarket.us/real-estate-glossary/pledge-of-shares) is signed by the borrower, the lender may be willing to remove a bad boy carve out.
- **LTV capitalization**: if the loan to value is conservative (i.e. 65% instead of 80%), then the lender may be willing to remove the bad boy provision from the loan agreement because the property is worth considerably more than the loan, and liquidation through foreclosure or pledge of shares should adequately allow the lender to recoup their loan principal and any fees.

Bad Boy Carve Outs protect lenders in non-recourse DSCR loans if the borrower engages in illegal or fraudulent activities during the loan process.

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Bad Boy Carve Outs | OfferMarket Real Estate Glossary

Bad Boy Carve Outs

Grow your real estate investing business with the most competitive DSCR loan product. OfferMarket provides DSCR rental loans, bridge loans, hard money, fix and flip, slow flip, and ground up construction loans.

Private Lending | OfferMarket

Private Lending

The Lock In Effect

Real Estate Investing Sayings

This is an important question that deserves careful consideration in order to be a successful real estate investor.

 

Let's start with *first principles* -- what do we know to be true about real estate?

 

- Real estate is capital intensive
- Capital intensive industries require financing
- Increases in interest rates make it more expensive to finance real estate
- When real estate becomes more expensive, demand goes down
- When demand goes down, prices appreciate slower or decline

 

## The Lock In Effect

 

As interest rates have rapidly risen from historic lows, home owners that would otherwise consider selling are having a difficult time justifying trading in a home financed at an interest rate in the high 2s or 3s for a home in the 6s or 7s. As a result, if interest rates remain elevated, we believe there will be less selling. Less selling means less inventory (supply). This will support elevated home prices, or at least reduce the chances that we see a broad decline in home prices.

 

## Real Estate Investing Sayings

There are a few sayings that drive home the answer to this question: 

 

- *Time in the market is better than timing the market.*
- *Don't wait to buy real estate. Buy real estate and then wait.*
- *Marry the deal, date the rate.*
- *Buy the best and wholesale the rest.*

 

##

Is now a good time to buy real estate? This is an important question that deserves careful consideration in order to be a successful real estate investor.

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