Grow your real estate investing business with the most competitive and transparent private lender for bridge loans (hard money, fix & flip, rehab, ground up construction), DSCR rental loans.

Private Lender for DSCR Loans and Fix & Flip Loans | OfferMarket

Private Lender for DSCR Loans and Fix & Flip Loans

The Nationwide Multi-State Licensing System or NMLS is the system of licensure for mortgage companies and [mortgage loan originators](https://offermarket.us/real-estate-glossary/mortgage-loan-originator) (MLO) in the United States. The acronym NMLS is commonly interpreted as the Nationwide Mortgage Licensing System.

The Nationwide Multistate Licensing System or NMLS is the system of licensure for mortgage companies and mortgage loan originators (MLO) in the United States.

Nationwide Multistate Licensing System (NMLS) - OfferMarket

What is NMLS in real estate?

The After Repair Value (ARV) is the value of a property after completion of a renovation. 

 

For example, if you bought a house for $100,000, invested $50,000 into a cost-effective renovation, and it then appraised for $200,000, the ARV is $200,000. To estimate the ARV of a property, you can look at the comparable home sales and listings ("[comps](https://offermarket.us/real-estate-glossary/comps)") to see what properties with similar characteristics in a neighborhood are selling for.

 

Using the [BRRR](https://offermarket.us/real-estate-glossary/brrr-buy-rehab-rent-refinance) real estate investing method, your budget of purchase price plus rehab would ideally be no higher than 75% of the ARV. For example, let's say you bought a property for $50,000 and invested $25,000 into repairs. That's $75,000 of invested capital. Now, when you go to a lender to refinance the property by taking out a mortgage, the home appraises for $100,000. The ARV in this example is therefore $100,000. Since most lenders require 25% down for non-primary residences and investment properties, you're able to cash out 75% of the appraised value of the property -- that's $75,000 which is is the entire amount you invested in the project.

The After Repair Value (ARV) is the value of a property after completion of a renovation. 

After Repair Value (ARV) - Real Estate Glossary - OfferMarket

What is ARV in real estate?

Tax lien certificates are financial instruments associated with overdue uncollected property taxes. Tax lien certificates are sold by local governments to investors who acquire: 

 

1. responsibility for collection from the delinquent taxpayer
2. a lien on the delinquent taxpayer's property
3. a set interest rate that accrues on the principal value of the certificate, payable by the delinquent taxpayer

 

### For example

 

Harry Homeowner did not pay his property taxes for 123 Main St and he owes $1,000 that are normally collected by the city of Springfield. Springfield holds a tax sale every June where investors submit bids to purchase tax lien certificates. At the latest Springfield Tax Sale, Ivan Investor purchases the tax lien certificate associated with Harry Homeowner's property for $1,000 from the government of Springfield. The government of Springfield has now recouped lost revenue, which is the purpose of the tax sale.

 

Ivan Investor then contacts Harry Homeonwer to let him know that he owns the tax lien certificate for 123 Main St, and the current balance is $1,000, with interest accruing at 16% annually.

 

After 1 year, Harry Homeowner decides to sell his house and, in order to remove the lien to establish clean title, he pays Ivan $1,000 principal plus $160 in interest. Ivan Investor earns 16% return on investment.

 

### How to invest in tax lien certificates?

 

To invest in tax liens, you need to register for your local government's annual tax sale and submit your bid for tax liens associated with specific properties.

 

#### Related terms
 

- [Mortgage Forbearance](https://www.offermarket.us/real-estate-glossary/mortgage-forbearance)
- [Eviction Moratorium](https://www.offermarket.us/real-estate-glossary/eviction-moratorium)
- [Foreclosure](https://www.offermarket.us/real-estate-glossary/foreclosure)

Tax lien certificates are financial instruments that transfer tax collection from the local government to the investor. The investor pays the local government for the right to collect unpaid taxes from a real estate owner.

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Tax Lien Certificates - OfferMarket Real Estate Glossary

What are Tax Lien Certificates?

The **Scope Of Work** is a document prepared by you (the real estate investor) or your general contractor to communicate, in detail, all of the work planned for a fix and flip, fix and rent or ground up construction project.

 

The scope of work is one of the most important loan processing documents because it is used by the appraiser to determine the [after repair value (ARV)](https://www.offermarket.us/real-estate-glossary/arv-after-repair-value) of the property. Your private lender (underwriter, loan committee) uses the ARV opinion from the appraisal report to determine the loan amount, and whether or not the deal even makes sense to fund.

 

## Avoid Low Appraisal With A Solid Scope Of Work

 

If your scope of work is not thoughtfully prepared, your appraisal may come back low and the following can happen:

 

- your loan may not get approved (deal economics don't work)
- you need to get the property re-appraised or request revisions from the appraiser (time consuming and seller can back out)
- you need to fund more of your project out of pocket because of a lower than anticipated loan amount

 

## Scope Of Work Example

 

<iframe src="https://docs.google.com/spreadsheets/d/e/2PACX-1vSXX7kyzeWxBLV09vF7UrglDf9upavh5mTzUJRYh8b04ZCHtFjDVpaq6WWTVnJqkBGX7quls_WnvtOv/pubhtml?gid=1964227889&amp;single=true&amp;widget=true&amp;headers=false"></iframe>

 
 

## Scope Of Work Best Practices

 

The most important things:

 

### Provide a detailed narrative 

 

*See "Project Information" section above, this is where you share your narrative when you work with OfferMarket as your private lender.*

 

This is your opportunity to tell the story of this project and convince the appraiser and underwriter that you know what you're doing. Confidently pitch what you plan to do to increase the value of the property in a cost effective manner.

 

### Be specific about each component of your rehab

 

You may be busy and this may be the last thing you want to be spending time on, but the scope of work really is one of the best uses of your time. Not just to optimize your ARV, but also to think through the nitty gritty details of your project. Thoughtful completion of your scope of work will ensure your project is properly budgeted, executed and your profit (flip or cash out refi) is optimized.

 

### Make sure your numbers add up

 

You would be surprised how often borrowers say the rehab budget is one amount (i.e. $100,000) but then provide a scope of work with sections that add up to a different amount (i.e. $111,000).

Scope Of Work is a document used by private lenders and appraisers to evaluate a real estate investor's fix and flip, fix and rent  or ground up construction deal.