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Archive for the ‘Finding Private Money’ Category

Hello Everyone,

Hope everyone had a great Thanksgiving.  It’s back to work!

A couple weeks back, we made an offer on a great 3 family nearby.  It was recently rehabbed and de-leaded, rented with long term tenants and it also had a parking lot for extra income.   The cash flow would be at least $800 a month, depending on our financing.  We made a first offer of owner financing at 8% with a 10% downpayment (I looked at the on-line deed records and I thought the seller may have owned it outright).  The seller came back and countered with non-owner financing, he countered pretty close to asking.  We countered again for about 11k under asking. The seller came back asking about $6k under asking, but we said our last offer was highest and best.  We haven’t heard back, so I assume he’s not interested.  Our Agent told us that they also had another offer on the table, for the same amount (as our final offer).  Interesting, huh?   This one would have been great, but we’re not going to overpay.   The seller just bought this house back in April for $215k and wanted to sell quickly, but I guess he didn’t want to sell that fast enough, since he has it listed for $239k.   And I just got word that the house went under agreement today.  Another one bites the dust (cue the song).

Oh, and one of the REOs we made an offer on a while ago is back on the market again.  This means the property will be on the market close to a year and a half…and they wouldn’t take our offer?  These banks are really ridiculous.   I guess they want to go through another winter with maintenance, snow removal and the risk of  frozen pipes. 

In the process of looking at this deal, we talked to a lender about conventional financing for rentals. I knew this was a waste of time, since we are down to one income since my husband was laid off.  But, the guy I talked to was nice and suggested just going with my income, since I have long term job employment.  He was impressed by my (and our) high credit scores, but said my own debt to income ratio is too high to buy a rental, which I know, since we already have a mortgage and other bills.   But, I did talk to a couple of other hard money types that have been helpful.  There are some awesome people over at BiggerPockets.com (BP) that have been great.  BTW, if you are not a BP member, do join, it’s a great place to learn and connect with others.  The main sticking point is that we don’t want to take all of our reserves to use as a 30% (or more) downpayment, since that is a significant amount of money here with our local real estate prices.  So, I gotta figure out a way to make it work. I’m a little stuck in the private lending department, too.  It’s a long story, but with my 9-to-5 and the work I do, I do have SEC guidelines I follow with my day to day job, so private lending on the side is really not possible.  I need to find a way around this…I think I’d be ok with lenders with whom I have a previous relationship, but to seek out new people I think would not be possible.  I am still loving the PMBP course, and I knew my job would be an issue, but I may need to hold off private lending until I leave the job. 

So, in the meantime, we are still looking at REI and other ways of making passive and not-so-passive income…like getting back into eBay and stuff like that.  Anything we can do to make enough to pay our bills (to reach our “number” found in Shae’s Financial Freedom GPS), is what we need to do.

That leads me to my goals for next year.  I really need and want to be out of my job by next summer. I am willing to do anything I need to accomplish this.  I just wish all these things I want to do wouldn’t take as long as they should to happen!

Happy Investing!

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Well, it was a slow week REI wise.  I had a really busy week at work and also was not feeling great.  Also, a lot of REOs we were interested in were no longer available this week.   I assume this is because offers were made, not due to the recent suspension of foreclosures.  We’re going to get going and look at more properties.  I am thinking we may need to start looking at less REOs, if the suspension of foreclosures becomes more widespread.

We also sent out the rest of the inheritance letters a few days ago.  We also sent follow-up letters to people who had contacted us as a result of the first mailing, but were not interested in selling.  I’m hoping to get some bites on those letters.

I also have been doing some private money research.  I was looking at the county deed records and noticed this one person’s name show up over and over.  Well, from what I can tell, this dude is a big time private money lender, lending to real estate investors and development companies.   I figure I can send him a letter asking him to see if he’s interested in investing with us.    However, I do want to be sure I’m SEC compliant and do things the right way.  I also don’t want to look like I was stalking him or something.  I need to check my PMBP course to see if there a letter template for such a scenario. I haven’t found it yet, but I only looked quickly so maybe I missed it.  I need to do  more research.  In the meantime, I thought I’d draft a letter saying something like I noticed he lended to other real estate investors and wanted to see if he wants to invest with our company.  Any suggestions would be helpful!

We’ve also been talking about changing our investing strategy a bit.  Not that we don’t want to rehab or wholesale, but we are also thinking about focusing more on rental properties.  We have seen a lot of good deals lately, so we have been looking at more multi-families instead of focusing on single family homes.

Have a great week!

Happy Investing!

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Still no word on our latest REO offer. I think at this point, the bank’s listing Agent is trying to string us along.  They still haven’t given us the status on the Title V (septic) testing, which happened over 2 weeks ago.  And he has since posted about 16 photos of the property to the listing  (there was only one lousy photo on the listing previously).  No price drop yet, though. I think he wants us to back out so he can get a full price offer from a homeowner.  Hey, maybe he can…but you’d think they’d consider any offer since it’s been on the market 390+ days. Oh well.

The rental property lead I got from Craigslist won’t work out, I don’t think.  He wants about 50k more than it’s work, IMHO.  I got a couple new calls from our July inherited property mailing (and we still have more letters to send).  So, I hope we can get a deal out of one of those leads.  I’ve been waiting to mail the last batch since those houses are in a more depressed area in our county, about 45 minutes away.  I think if I buy these leads again, I’m going to pick and choose the cities closest to us, rather than the entire county.   With working a full time job and having a family, it’s hard to make appointments as it is, nevermind if the house is 45 minutes away.

And in the meantime, we’re still looking at more REOs. We looked a two on Friday and we’ll look at two more tomorrow.  Something’s gotta happen in the way of a deal soon, right?

I’ve also started writing down goals. I had done this in the past, but not for a very, very long time.  I’m hoping if I do it this time, they goals will come to fruition.  I also made up an index card of some goals and “quick hits” so I can look at them daily.  I also am really trying to make it so I can leave my job by next July.  Maybe if I say it out loud enough times, we can make it happen.

Today I got my PMBP course in the mail. Yahoo!  I cannot wait to check it out.  I was listening to the modules on-line in the meantime.  Speaking of PMBP, have any of you with the course used the “private money getting” website to obtain private lenders?  If so, how is that/did that work out for you?  I know the SEC rules are tricky, so I want to be sure to follow all the guidelines (especially since my full time job has to do with financial services so I cannot cross those lines in any way).  

I also got my Steve Cook Flipping Home Bootcamp CDs (not DVDs) that I won from re-naming Scott Costello’s blog so I want to listen to that course, too!  

That’s it for now.

Happy Investing!

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I got an email today regarding a 1/2 price sale  on the Private Money Blueprint course from Patrick Riddle and Trevor Mauch.  I read the sales page and decided to bite the bullet and purchase the course.  It was an offer I couldn’t refuse! 🙂  Part of the reason,  besides the price, that I purchased it was because when submitting our REO offers lately, we seem to be getting some issues from banks about our pre-approval letters.  I’m hoping that if we have some private lenders set up, it may make the offer process a bit easier (like making all CASH offers).  I know many people are already PMBP members,  so I’d love your feedback on the program, if you wish to comment.  Oh, and one of the reasons they were holding a sale is because Trevor and his wife had a brand new baby girl – so congratulations to them!  I’m a sucker for a cute baby story!

Also, just a quick update on our latest REO offer.  We’ll, it’s still in limbo.  Partly because they’re doing a Title V (septic) inspection on the property. Once we get the details on that, we will adjust our offer accordingly.  Also, it’s pending because we offered way low (like 80k under asking), based on our estimated repairs.  The house has been on the market over a year.  The bank’s Agent told our Agent that the bank wouldn’t consider our offer and that we should make a “reasonable” offer.  Really?  You’ve been sitting on this house more than a year…isn’t any offer at this point reasonable?  He gave our Agent this song and dance about the bank needs to satisfy their stockholders and such.  Also, he told her that we were just wasting her time and that because we had a pre-approval from a hard money lender, that these types of buyers “never work out.”  What a jerk.  I am sure he’s been burned by other investors before but come on…he doesn’t know me or my husband or what our situation is. He doesn’t know that we’ve done a couple rehabs in the past (our own residences), that my husband has been a contractor, etc.  He can go pound sand, as my dad used to say!  So, who knows if that deal will work out either.

I’m still getting some nibbles from our inherited property mailing, too. The guy I mentioned last time basically wanted retail price, so I told him he’s best to re-list the house with the new Agent.  Another guy called me from out of state, so if he’s the sole owner of a house he inherited here in New England, maybe that’d be a deal.  I also got a lead (via Craigslist) from a landlord on a rental property in town that’s in excellent condition.  He’s asking more than what it’s worth (in my opinion), but I still need to research more. Maybe he’ll do owner financing, who knows?

That’s it for now.

Happy Investing!

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Hi Everyone,

Thought I’d give an update on what we’ve been up to lately. 

Buying a Rental Property – The past week or so, we’ve been looking at a ton of properties on-line and even saw a couple with a local realtor.  Last weekend, we saw a duplex and a triplex in our area.  The duplex is newer and in really great condition. One half is rented for $1400/month from good, long-term tenants who want to stay.  The other half is occupied by the owners who need to move out of state.  It’s a short sale and has been on the market over a year…and it’s still overpriced.  We wouldn’t consider making an offer anything close to asking price, but we’re still crunching numbers.  The triplex was a much older home that needs a complete rehab.  It would qualify for Homepath financing, but I think it’s more rehab we want to do for a rental.  If we could get it cheap enough, maybe we could flip to a local landlord.

Wholesaling/Buyers List – I’ve also been calling bandit signs and classified ads looking for wholesale buyers.  I am figuring we can target more buyers and what they’re looking for so we can find wholesale deals just for them.  Many of the other cash buyers on our list we obtained either from our Craigslist ads or our website, which is fine, but we also want to shop for deals specifically for our local buyers.

We Need Money – Lastly, we are looking for money for deals.  I am considering purchasing the Private Money Blueprint course.  I also have seen some “cheaper” courses on the same topic.  If anyone has feedback on obtaining private money or courses to take, that’d be great.  I also have been contacting local commercial/portfolio lenders looking to see if they could fund rentals for us. I talked to a great guy yesterday at a local, small credit union.  He gave me a complete rundown of their rates and terms and really walked me through their process, so I’m gonna keep him in mind to see if that will work for us.  The only sticking point with that option is if we buy more than one rental, we may not (initially) have all the downpayment money needed, that’s why I’m thinking we need private money, too.

Happy Investing and Happy 4th!

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I think the hardest part about Real Estate Investing is feeling confident you have the money to close your deals (especially your buy and hold deals).  It’s tough because in this market there are a lot of deals to be found, all you need is the money.

I saw a link on my favorite wholesaling blog to this webinar regarding private money.  Check it out!

By the way,  if you haven’t checked out TampaSteph’s wholesaling blog  , you must do so!  It’s full of tons of helpful tips and it’s also funny at the same time.  Enjoy!

Happy Investing!

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