Hey guys, my question is pretty simple. How would you invest your 100k cash? This should be fun. :)

Okay, sorry I'm late, I see I was summoned, LOL I was a "hard money" lender and a residential secondary market broker/originator then banker meaning that we funded at the table and sold the mortgages...pretty quickly most of the time. We also did commercial brokerage and funidng on smaller deals, 100K to 2M. Also did some leasing and floor planning for inventory. Residential loans are primarily done on sales transactions until the public is aware that you exist and the refis come in, refis also come from your own past originations. I already explained the origination of seller financed deals, loan servicing of installment contracts and notes which ultimately turn into refis or purchase money deals as well. Marketing is done directly to all real estate offices, lenders provided "Rate Sheets" (now and also on line) to real estate offices. You go in and pass out rate sheets, talk about your programs and have some face to face time with Realtors. This is where your originations come from. Just a few good Realtors can keep you busy. For any real estate lender, residential or small commercial deals, Realtors start your business. Many of you may be surprised to know that alot ofbusiness also comes from other lenders. I had a brokerage or origination arrangement with a few banks. While I did take a few deals their way, they brought deals my way as well. I did alot of jumbo loans for a local regional bank as they did not do jumbos. If they had, say a doctor as a banking customer, they did not want to tell them to go someplace else and they simply explained that due to the nature and importnace of that loan that they would have their mortgage originated by an affiliated broker to ensure they got the best deal....(yes marketing) but what it was was the fact that I did not compete with them with checking, savings, trust banking or other services, just loans. In return I would also explain that we (the bank and I work together on special loans and would act more like I was originating for the bank, which I really was). Anyway, point being that while you may think banks and brokers may be cutting each other's throats, they may also be working together. DId basically the same thing with commercial loans, in whole or participations, moving the papaer after closing. That's the nuts and bolts, short version. Your reputation is what carries the lending business, who can "make" the loan, who can get it done, who can work out the problems and who has solutions or alternatives. I was pretty creative and very good at getting deals done, the fact that other lenders send you business was a two edge sword too, you get the business and more grateful clients and Realtors, but sometimes they were a pain and could have done two deals for the time spent, but it really meant less coffee drinking time.....LOL Right now is a hotter time than in the 90s for refis. A lender can simply open a file and see who will benefit from the refi. I'd call them and have a five minute conversation and they would be in my office. The premiums were often so much that I could pay some or even all of the closing costs (getting a deal on those costs) and refi them. Rates changed so quickly and drasticly that I would close one loan and immediately refi it at the closing table with the same mortgage banker on brokered loans. (BTW, that was the birth of seasoning requirements as quick refis backed up the pipeline upstream). Today, a no cash out refi can still be done pretty quickly, but there is no real savings, so they are not as active as the old days. Then, originating seller financed transactions (working FSBO by my originators) as well as attorneys who referred services in a limited and liability free manner (LOL) these deals could be purchased, so there was the aspect of buying notes. That's how it started and by making contacts with estate attorneys, bankruptcies and government services we would be contacted about purchasing obligations. I also did a few seminars for Realtors and would meet with attorneys, CPAs and Stock Brokers building relationships with them. I never had to run a TV or radio ad. I used some newspapers for a short period and never again. So, I really didn't do conventional advertising, being the Loan Arranger as some called me. (I'm sure others have used that name, LOL, but "they" nicknamed me). People would say they never heard of me (the public) and my response was..."I'm very busy and doing my best to keep it a secret"! And actually, kinda sorta did by never advertising. You'd be amazed at the power of word of mouth in RE! I guess I could say that my 25K loan in this thread could have been for transactional closings and getting my money back with end loan financing, churning my money at least 4 or 5/6 times in a year, that's roughly an additional 3,000 bucks on 25K plus interest. I seriously doubt any landlord could keep up with a loan porfolio of short term notes. As to financing personal property, if you are in the business of lending, you will need a license in all states, if you make the loan to a car dealer, that would be commercial and many states don't require registration unless your are "in the business of lending". Making 'A" loan is usually not a problem, making ten probably will be. There is a little insight to lending, the marketing and building a portfolio. Good luck.......

Here I was thinking I'm going to see some advice on buying a few SFRs etc, but wow, note investing huh? This is the great thing about this site - so many different personalities. I am inspired to properly read up on note investing or hard money as I think for my personal situation that would bring me greater traction as I start my investing career than those first few SFRs until I am in a position to really scale up.

I can't imagine that there is a bank that will loan at 4% on a note that is 80% unsecured. (i.e. 5 to 1 leverage on a CD), UNLESS one has the financial strength to support an unsecured line of that amount. They have insufficient collateral, risk pricing would demand a much higher rate.

I stumbled onto this topic today, and I just happened to be hitting someone up for a $100,000 cash today. So I'll share what I want to do with it. Its similar to Bill's but with a twist. If I had a $100,000 cash, I would put it into a CD, leverage it with my bank for a $500,000 credit line, and get back into hard money lending. Many of my customers would be my same customers now with my wholesaling company. I'd charge 18% interest, probably broken down to 12% interest and 6 points on 12 month notes. Let's look at the returns. If I loan out $100K at 18% APR, I earn $18,000 or an 18% yield/ROI/CCR. If I loan out $500,000 at 18% APR, I would gross $90,000. The going interest rate on a line of credit is 2 points over a Certificate of Deposit, so let's say 4% interest on the line of credit. 4% on $500,000 is $20,000 in interest. $90,000 gross minus $20,000 payment to my line of credit is a net profit of $70,000. That's a 70% yield on my money. You can't beat the returns. This, of course, doesn't factor in the latency of my money when it isn't loaned out, but it shows the power of leverage. In Texas it doesn't require a mortgage broker's license to do non-owner occupant loans. There are some laws to understand but I already understand most of them, and I'd counsel for free with the best real estate attorney in town to find out any new statutes I need to know. He would do it for free because he would be drawing up my lending documents (deeds and deeds of trust) on my deals. I already have several entities to do business through or I could drop $1,000 with that same attorney to set up another one just for lending (he set up my other entities for me). Obviously there are also basic components of real estate investing that are extremely necessary to understand. I appreciated Bill's description of some of those components. To be a successful hard money lender, you really need to have an extremely strong understanding of the fundamentals of investing yourself. I've seen several hard money lenders pop because they didn't understand the fundamentals of investing and I've seen several pop that understood the fundamentals but they weren't diligent in working them. Understanding and diligence are both necessary. So either way, if you still don't know what to do with that $100,000, why don't you loan it to me? :)

That is tough to answer when you live in San Fransisco. Down here in South Florida you can do a lot with 100K, but in San Fran I don't know that to be true. If you are looking to just do a quick flip, you need to just start looking online using the MLS if you have access or if you're not a licensee, use Realtor.com. The way I got into Real Estate investing was by doing A LOT of research and investigating. Learn your area by using the maps function in Trulia, Realtor, Zillow.com etc. Drive around and check out what you see and think is a good deal. Zillow allows you to see what has recently sold, what has recently rented, and what is on the market now. Once you get an idea of prices in the areas you like, I would say continue to search in the areas you prefer. For instance, in South Florida the beach and downtown areas are the best for rentals; but the family neighborhoods out West have better school districts and are more appealing to families. If you want to create residual income, I have found that studio apartments generate a lot of money if they are in a great downtown area. If you could get into a duplex, triplex or four-plex; you would still be dealing with residential and you could create a money making machine if you get the right deal. Do you want to build a portfolio of property which brings in income every month and cash out later on in life or the best market condition? Or do you want to just do a deal and make some sweat equity? My portfolio is built on long term rentals that bring in decent monthly income; but you may want to just make a quick buck? Honestly, this is a really open ended question and you have to figure out what works best for you. Sounds like you should do a lot of networking with people in the area and get some ideas. Don't talk dollars, meaning don't run around saying you have 100K to burn; just start asking the right people the right questions in your area. I would highly recommend finding out what book the local Real Estate licensee testing center uses, buy it used and READ IT! If you are already educated in Real Estate, have a bachelors in Real Estate or have your license than you're good to go. But if not, take the time to learn what you're doing before you spend all of your savings. Just my two cents, you asked for it =) Chris

start thinking about pumpkins...but seriously it depends on your experience. I would partner with a rehabber on a fix and flip

I thought the same thing, lol. I've read a bunch of books on note investing, hard money lending, etc, but it's tough when you're just getting started to know which direction to take. I'd like to buy a cash flowing single or multifamily home in the Olathe (KC suburb) area but the ROI just isn't there compared to KCMO unless you're investing for appreciation and not cash flow. After looking for the past 3 months I'm trying to expand out to the Missouri side but I haven't had good luck getting responses from listing agents so far...need to find a good real estate agent over there.

We have been doing owner carry deal on assets the banks will not fund. Example. Bought double wide for 20K as part of a package. Tenant moves out and trashes the place. Sold the asset for 29,900 "as is" with 5k down. 5 year note at 9 percent. ***Just make sure you check income docs to ensure they can afford the home. Based upon the arbitrage of our purchase versus the exit deal. That had a 31 (unlevered) percent a year COC return for 5 years. That is if he stays under the note for 5 years. When EMPLOYING capital there are few basic questions you have to ask yourself. 1. What is my minimum rate of return. Opportunity cost should be tied to other yields available. 2. When will I need this money back? 3. How much capital are you working with? Here it is defined. 4. What is my risk tolerance? PS spend twice as much time underwriting the downside as the upside. To have a return on investment makes getting the return of the investment pretty critical. The golden goose is in season, go get em!

Here is the best idea for you. Put it in gold coins about half. Use the other half as a cushion and buy real estate on terms and sell on terms and never use your own money.

100k CASH - WHAT WOULD YOU DO?100k CASH

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100k CASH - WHAT WOULD YOU DO?

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