My Cash...is Worthless.

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My Cash...is Worthless.

Casey Roman
Member since 2018 · 26 posts · 34 votes

I have been trying for years to reinvest $100,000 into some form of real estate and have gotten absolutely nowhere. Because I own my own business and deduct HEAVILY off it, I qualify for zero mortgages, even with perfect credit. Moreover, Coronavirus has successfully killed my shot at non-traditional loans. 

I live in a highly desirable coastal area. There is no such thing as buying the $60k house here, doing repairs and re-listing at $250k. Even complete dumps are $150k so my $100k goes nowhere. Land is a fortune.

Without a mortgage I can't buy a rental property with just $100k. I've tried wholesaling but given the desirability of this area, most homeowners think they have oil under their property and can sell for far more than I can offer them.

It seems like my only option is to buy a double wide or invest in REITs - neither of which overly thrill me. 

The biggest need here is affordable housing. 

Its easy to feel like you've run out of options after slamming your head into the wall so I wanted to check in here. Are there other avenues of real estate investing I'm overlooking? Other financing I've ignored? Or...do the cards just fall sometimes where it's just not favorable under your personal circumstances?

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Joseph CacciapagliaBusiness Member
Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
6y

You could be a private lender, yields on private loans have jumped up lately. You could invest with a partner or in a syndication. You could invest out of state. Most of my clients are from a more expensive market. If you have cash, you can certainly get into the game. You might just need to get a little more creative.

[email protected]979-218-2286
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  • Paul Shannon
    Rental Property Investor · Fishers, IN · Member since 2016 · 335 posts · 470 votes
    6y

    Have you tried raising private money or finding a seller who will do seller-financing?  

    Lots of retirees have nowhere to make income on their investments with interest rates at Zero.  If you could structure a deal to give them a 5% return and you still make money, with trust, they would jump.  

    With seller financing you may pay a higher interest rate (8-10%), but in many cases you wouldn't have to bring as much to the table at closing, so there's that for upside.  

    Just need to get creative. 

    30Reply
  • Casey Roman
    OP
    Member since 2018 · 26 posts · 34 votes
    6y

    My go-to idea was seller financing but the investors I know here are not overly optimistic about the idea because of what can happen if the seller decides not to sell after all or any judgements are placed on the property. We have MANY retirees here though...

    2Reply
  • Joseph CacciapagliaBusiness Member
    Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
    6y

    You could be a private lender, yields on private loans have jumped up lately. You could invest with a partner or in a syndication. You could invest out of state. Most of my clients are from a more expensive market. If you have cash, you can certainly get into the game. You might just need to get a little more creative.

    [email protected]979-218-2286
    Joseph Cacciapaglia powered by Morty
    WebsiteView Page
    38Reply
  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    6y

    The problem isn't the lack of enough cash...the problem is the lack of enough knowledge of the many other ways to use cash to buy RE.

    1 - Seller financing (seller holding the note)

    2 - Seller Financing (using a lease option or sandwich lease option)

    3 - Equity sharing

    4 - Buying Out of State

    5 through ???

    32Reply
  • Casey Roman
    OP
    Member since 2018 · 26 posts · 34 votes
    6y
    Originally posted by @Joseph Cacciapaglia:

    You could be a private lender, yields on private loans have jumped up lately. You could invest with a partner or in a syndication. You could invest out of state. Most of my clients are from a more expensive market. If you have cash, you can certainly get into the game. You might just need to get a little more creative.

    This is actually what interests me the most. I'll be quite blunt...I am NO landlord. I have been in the past and I have also done AirBnb rentals and I find that my zero patience, zero brain-to-mouth editing function has severed me little in those realms. Joseph do you think I could get started in this with just $100k? Are there any education sources you recommend? I imagine the legal aspects are enormous and I'd like to start learning asap. 

    2Reply
  • Joseph CacciapagliaBusiness Member
    Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
    6y
    Originally posted by @Casey Roman:
    Originally posted by @Joseph Cacciapaglia:

    You could be a private lender, yields on private loans have jumped up lately. You could invest with a partner or in a syndication. You could invest out of state. Most of my clients are from a more expensive market. If you have cash, you can certainly get into the game. You might just need to get a little more creative.

    This is actually what interests me the most. I'll be quite blunt...I am NO landlord. I have been in the past and I have also done AirBnb rentals and I find that my zero patience, zero brain-to-mouth editing function has severed me little in those realms. Joseph do you think I could get started in this with just $100k? Are there any education sources you recommend? I imagine the legal aspects are enormous and I'd like to start learning asap. 

    Which "this" are you referring to, the private lending, syndications, or partnering? $100K should be plenty for any of those strategies. If you're looking for the most passive method, then I'd look into investing in others syndications. There's a book in the BP bookstore called the Hands Off Investor. I haven't read it, but have read a lot of posts and articles from the author, and he seems pretty sharp. Or, just find a someone you like and trust that is investing, and offer to partner with them on deals or lend them money. In either case, consult a real estate attorney to write up the agreement. That will require more upfront negotiating on your part, but could potentially be more lucrative.

    [email protected]979-218-2286
    Joseph Cacciapaglia powered by Morty
    WebsiteView Page
    3Reply
  • George W.
    Investor · NJ · Member since 2018 · 869 posts · 921 votes
    6y

    Is there a town near within a hour that's less desirable than your current area? Maybe a town where land is cheaper? Undeveloped yet. I'm in a very expensive state as well. But there are still parts that are less expensive than others. If I had 100k cash I would look for undervalued commercial zoned land or subdiviable residential lots. 

    Last year they started digging ground on a large 55+ older community in my area. I saw a 10 acre boarded up ranch for sale directly across the street from the main entrance, commercial zoned they were for sale by owner and only asking 300k it was an estate sale. I tried everything in powers to get that property but turns out someone saw the same potential as me and just had way more cash than I. I'm sure that whoever bought it will sell it for 600-700k or build a small shopping center. Cash is king. 

    point is somewhere probably not too far either, your 100k can go alot further than you think.

    8Reply
  • Casey Roman
    OP
    Member since 2018 · 26 posts · 34 votes
    6y
    Originally posted by @Joseph Cacciapaglia:
    Originally posted by @Casey Roman:
    Originally posted by @Joseph Cacciapaglia:

    You could be a private lender, yields on private loans have jumped up lately. You could invest with a partner or in a syndication. You could invest out of state. Most of my clients are from a more expensive market. If you have cash, you can certainly get into the game. You might just need to get a little more creative.

    This is actually what interests me the most. I'll be quite blunt...I am NO landlord. I have been in the past and I have also done AirBnb rentals and I find that my zero patience, zero brain-to-mouth editing function has severed me little in those realms. Joseph do you think I could get started in this with just $100k? Are there any education sources you recommend? I imagine the legal aspects are enormous and I'd like to start learning asap. 

    Which "this" are you referring to, the private lending, syndications, or partnering? $100K should be plenty for any of those strategies. If you're looking for the most passive method, then I'd look into investing in others syndications. There's a book in the BP bookstore called the Hands Off Investor. I haven't read it, but have read a lot of posts and articles from the author, and he seems pretty sharp. Or, just find a someone you like and trust that is investing, and offer to partner with them on deals or lend them money. In either case, consult a real estate attorney to write up the agreement. That will require more upfront negotiating on your part, but could potentially be more lucrative.

    Apologies, the "this" as in regards to private lending. 

    0Reply
  • Casey Roman
    OP
    Member since 2018 · 26 posts · 34 votes
    6y
    Originally posted by @George W.:

    Is there a town near within a hour that's less desirable than your current area? Maybe a town where land is cheaper? Undeveloped yet. I'm in a very expensive state as well. But there are still parts that are less expensive than others. If I had 100k cash I would look for undervalued commercial zoned land or subdiviable residential lots. 

    Last year they started digging ground on a large 55+ older community in my area. I saw a 10 acre boarded up ranch for sale directly across the street from the main entrance, commercial zoned they were for sale by owner and only asking 300k it was an estate sale. I tried everything in powers to get that property but turns out someone saw the same potential as me and just had way more cash than I. I'm sure that whoever bought it will sell it for 600-700k or build a small shopping center. Cash is king. 

    point is somewhere probably not too far either, your 100k can go alot further than you think.

    Interesting! Unfortunately we fall off the grid pretty fast here. I'm in Wilmington, NC so any land even REMOTELY near the water is a fortune. Once you cross the bridge you get out of dodge VERY quick. About an hour away land is much cheaper but there is no industry except agriculture until you hit 2.5 hours away and get to Raleigh. That said, your suggestion has clued me in to looking at whats around our massive "in house" communities. We have enormous development projects targeted at Northern retirees that have their own groceries, pharmacies, restaurants, etc. I'm not sure I can afford the surrounding land but I didn't think to consider it until you mentioned it. Thanks! 

    0Reply
  • Adam Frank
    Rental Property Investor · Wilmington, NC · Member since 2016 · 19 posts · 9 votes
    6y

    There’s hampstead, holly ridge, Sneads ferry, swansboro. 
    All are far more affordable than Wilmington with the exception of hampstead.

    3Reply
  • Patrick Menefee
    Real Estate Coach · Charlotte, NC · Member since 2016 · 399 posts · 341 votes
    6y

    @Casey Roman it seems you have a couple of great options, especially being in North Carolina. My properties are currently within an hour of where I live in Charlotte, but I also have another couple properties under contract in Fayetteville. There is plenty of opportunity throughout the state if you're willing to extend past Wilmington in one of a few ways

    1. As others have mentioned, you could serve as a private lender. You and the investor agree on the terms of the loan and any collateral, and then you have an attorney draw up the promissory note

    2. Another option is to partner with someone already doing the work and investing as an equity partner. You come to the table with cash, they come to table with the deal and all of the work required to tackle and maintain the deal, and you work out a split where you have an ownership stake. Again, this can be drawn up via a contract that is vetted by an attorney

    Hope that helps!

    4Reply
  • Patrick Menefee
    Real Estate Coach · Charlotte, NC · Member since 2016 · 399 posts · 341 votes
    6y

    @Casey Roman just went back and realized this is almost the same as what @Joseph Cacciapaglia explained! Oops

    You asked about if you can get started with just $100k...the short answer is absolutely. The long answer depends on your goals, what you want to invest in, where you want to invest, who you're investing with, etc. If you're partnering/lending on single family or small multifamily properties, it's absolutely enough. You may be able to work together with someone to provide most or all of the down payment, fund a rehab, or provide some other type of partnership and/or short term money

    As far as resources go, I can't recommend books that directly speak to your side, but I can provide personal case studies from my own partnerships with private lenders/money partners and I can also highly recommend the book "Raising Private Capital" by Matt Faircloth. This is written for the investor looking for capital, but allows you to get a look at what the investor/potential partner is looking for and thinking about.

    3Reply
  • Steven Custer
    Real Estate Agent · Mooresville, NC · Member since 2017 · 9 posts · 5 votes
    6y

    @Casey Roman

    Completely understand the situation on hand. Being a business owner myself, we definitely have to jump through more hoops when looking for lending.

    I’m a realtor in the lake Norman/Charlotte area.

    My suggestion would be hard money lending (much higher interest rate) or possible go into cheaper markets. I’ve noticed up in hickory rentals do extremely well and very affordable. Might even find a decent duplex for 100k.

    0Reply
  • Matt Millard
    Lewisville, TX · Member since 2015 · 341 posts · 264 votes
    6y

    @Joseph Cacciapaglia

    Yes recommend a syndication. Mobile home & self storage.

    1Reply
  • Nigel Guisinger
    Rental Property Investor · Member since 2019 · 93 posts · 110 votes
    6y

    Sounds like you need to find one of two things. Either you need to find a seller carry where you use some of your cash and you have them carry the remainder. Or, you find a small local bank. Write a business plan.  Place the money in deposit at that local bank and borrow based on the plan and the deposits. They will look at the global portfolio.  You have the ability and tools to succeed. Just look for a different funding option. Your local bank needs you just like you need them. 

    2Reply
  • Storm S.
    Real Estate Agent · Santa Barbara, CA · Member since 2016 · 518 posts · 283 votes
    6y

    @Casey Roman imo unless you have a screaming good deal or can get 100% financing, cash flow on day 1 and plan on holding for life, I would be investing in REIT's right now. They are trading at pretty good discounts to there net asset value and you can get some good deals with all this market volatility. Cell tower and data center REIT's are going to be the top preforming sectors and if your a value investor I'd be looking at companies in the retail and hotel sectors like Store Capital or Simon Property Group. I was able to get Store for 15 and 50 for Simon a few weeks ago.

    3Reply
  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    6y

    Your mindset is everything.  People that don't have a high amount deal flow and look at enough deals think in that way.  I hear this all the time from my local investors but then I see deals every day that would blow their mind.  Look harder.

    8Reply
  • Bill F.
    Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes
    6y

    @Casey Roman

    I would check out the Coastal REIA when the open back up again. They have some good speakers and get a wide range of attendees who do a lot of interesting things. They could help you get a feel for what others have done in the area. 

    I'd also look outside of ILM as some people mentioned. Leland is growing, Sneads Ferry and Jacksonville, Holly Ridge, Swansboro are both great markets that serve base. There may not be $60k homes, but there are $80-100k homes up there. 

    0Reply
  • John Duston
    Accountant · Santa Barbara, CA · Member since 2016 · 213 posts · 66 votes
    6y

    @Casey Roman

    Sounds like a partner who can also qualify could be great use.

    Show a year of income on taxes then amend to put things like auto back on. May end up having to part the tax though

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    6y

    @Casey Roman can you focus on ways to make your business more profitable? I understand taking deductions, but there is only so many ordinary expenses you can deduct. If you are not making money, it is usually that the business isn't grossing much or there is undeclared cash income. 

    I would look at partnering with someone who has the ability to get loans, but needs more cash. If you can get into a property or two this way, it will build up your income base and help you qualify on your own.

    2Reply
  • William Walker
    Investor · Wilmington, NC · Member since 2016 · 211 posts · 262 votes
    6y

    @Casey Roman I’m in Wilmington and just bought a house for 87k that rents for 950. Plenty of houses downtown that are under 100k

    8Reply
  • John Teachout
    Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    6y

    If you saved up $100,000, could you buckle down and save another $50k so you would have enough to accomplish your goals?
    From the way you described your business, are you saying it's not profitable on paper? If so, then that would explain why you can't borrow based on it. Is there some other income source you could create to prove creditworthiness?

    3Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    6y

    Hi Casey, have you tried looking for owners with portfolios that offer owner financing? I have done several owner finance deals and they have worked out great for me. Do you have good credit? Good income? I would work on my pitch, and scour for owner financed deals. They are out there!

    1Reply
  • Bill Goodland
    Rental Property Investor · Allentown PA, United States · Member since 2016 · 567 posts · 442 votes
    6y

    @Casey Roman have you tried to find a partner that can qualify for a mortgage? Or that lives in a market that makes more sense?

    1Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    6y
    Originally posted by @Casey Roman:

    My go-to idea was seller financing but the investors I know here are not overly optimistic about the idea because of what can happen if the seller decides not to sell after all or any judgements are placed on the property. We have MANY retirees here though...

    Proper seller-financing was my first idea, too. By proper I mean you own it day 1 with a note and mortgage/deed of trust. Not an option, land contract or CFD where the above scenarios can happen. I like to target tired plexes.

    But, you are smart to realize you're not built to be a landlord.  I am one and am emotionally flat to a fault.  Not for everybody.

    So my next idea is seller financing on a NNN commercial building or warehouse/industrial property or vacant land you could build a flip on.

    0Reply
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