My Cash...is Worthless.

Starting Out
6yFollow

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?

21Reply
579 views

Most Popular Reply

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
See this reply in the discussion

162 Replies

Jump to latestLatest
  • Judy Parker
    Rental Property Investor · Closter, NJ · Member since 2015 · 884 posts · 722 votes
    6y

    Hi Casey, have you tried looking in more affordable areas or out-of-state?

    0Reply
  • Joseph Walsh
    Brookfield, WI · Member since 2016 · 191 posts · 108 votes
    6y

    I'm sure there are better options, but you could build, in a new development, especially if you get in early.  that 100k  (or portion of it) would go a long way toward a construction loan, which gets automatically converted to a tradition mortgage at the end.  The builders usually have a relationship with the lender to help smooth that process.  It's not ideal form a "buy low, sell high" perspective, but if you get in early, typically there is an early bump in property values in a new development,  you can often get hoa rules waved as an early investor, and often get a bit of a discount for being early.  then you have a mortgage to show for your next loan, a history of payments, etc.  You can sell after a year or two and make a marginal profit, but hopefully by then you have the bank relationship needed going forward and have acquired your next property already.

    0Reply
  • Rick Gill
    Toronto, ON · Member since 2020 · 11 posts · 1 vote
    6y

    @Paul Shannon Hey! Just reading on what you said and that’s actually a great idea that I was thinking of doing so as well. Just about finding that right investor

    0Reply
  • Diana Baccus
    Investor · Huntsville AL · Member since 2020 · 6 posts · 0 votes
    6y
    0Reply
  • Account Closed
    Investor · Vancouver, WA · Member since 2013 · 315 posts · 63 votes
    6y

    @Casey Roman

    I have looked into syndication's, partnership's, and done NNN/rentals. For me, as an non-accredited investor, nothing beats the returns for the amount of effort funding 2nd position notes on SFR flips. I have been funding projects for about six years in my back yard (Vancouver WA / Portland OR metro).

    Typically 15% simple interest for the duration of the project where your note/terms are recorded on collateral title via Trust Deed. Takes less than a day accumulative to underwrite. More specifically, contact title company to verify current 1st or 2nd position(s) amounts, estimate project ARV range (use an local agent for BPO if unsure), and determine your position coverage i.e. conservative ARV less other recorded position(s). Projects I fund typically cover my principal 300% based on conservative collateral value. Critiques to my approach is welcome feedback.

    After your note is funded/recorded you simply wait for the project to sell. Once the property is under contract the title company will give you a call asking where to wire your principal and interest. True that your return is fixed, however, you could spend a lot of time stabilizing a SFR, funding a turn-key set-up, or pay a syndicator to do similar analysis and manage managers for maybe 20% return with a lot more hassle/risk IMHO. Pro's and con's to all approaches, just wanted to share my experience.

    2Reply
  • Huan Nguyen
    Investor · New Zealand · Member since 2020 · 14 posts · 18 votes
    6y
    Originally posted by @Danny Webber:

    non qualified mortgage assumptions. I can get you 3 properties in Austin in 1 week with 100k.

    This is interesting. Does this mean you're limited to the properties with assumable mortgages, as I understand 99% of the mortgages out there aren't?

    1Reply
  • Alexander M Stanton
    Rental Property Investor · Worcester MA · Member since 2019 · 46 posts · 18 votes
    6y

    @Casey Roman

    Hey Casey,

    I know a wholesaler in Massachusetts who did talk with me about potential seller financing deals. I decided not to pursue it because I’m pretty overloaded with work and not quite ready or financially prepared to take that leap (I’m at 20k not 100k) but otherwise in a similar situation.

    Some lenders might consider a commercial loan with 25% down if you can present a really strong pitch for a property and justify the deal. Considering that’s closer to 5% that might work well for you!

    Otherwise, look for a partner with good income but not much cash! I’m sure there are plenty on here who would be happy to trade those resources with you.

    Best of luck!

    0Reply
  • Mark Sewell
    Investor · Houston, TX · Member since 2017 · 1k+ posts · 871 votes
    6y

    I know dozens of people that would trade to be your worthless cash position.  You need to leverage it.  

    COVID is a speed bump that might slow us down some but it isn't an excuse.  There are sellers out there.  And banks are still lending (albeit they have tightened up a bit).

    Honestly your finances are not the problem here - your negativity is holding you back.  I would challenge you to restate your post without using the word can't.  How can do what you need to do?  Because I suspect you can.

    If talking to sellers is hard, then OK I agree.  It is really hard.  I am not good at it.  But I will get better.

    Back to the story problem - you do have funds.  You have a great stack of reserves.  why no use Hard Money (local ones are your best bet) and do a low-end flip for now.  Try to stay around the median price level and keep it real.

    1Reply
  • Hai Loc
    Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
    6y

    Worthless meaning like Venezuelan Bolivar Fuerte?

    Like hyper inflation.. 

    0Reply
  • Derek Carroll
    Syndicator and Fund Manager · Victor, NY · Member since 2012 · 760 posts · 345 votes
    6y

    @Casey Roman

    $100k is significantly more than I had when I flipped my first house many years ago with a private lending partner. You have more then enough to start flipping houses and don’t need to even think about traditional bank financing. Flipping houses is a great way to build cash, but it’s active.

    If you want to be passive then as others have said you can be a private lender. To be clear, I don’t wish to borrow from you, I have more lenders than deals right now, but I pay 1% origination and 1% per month interest. If that sounds good to you I’m sure there are many qualified flippers that you could work with for returns like that.

    The other option is investing Passively in a syndication. We don't have any offerings currently but most of ours are in the 15% IRR range with a 2x equity multiple. There are many syndicators on here who offer similar returns. Al depends on the type of deal.

    Point is, there are LOTS of ways for you to invest your capital. Most importantly, choose your goals and then you can make a clear plan from that. Once you have a plan in place it will be much easier to narrow your focus and begin to see deals rolling in that match your expectations and investment thesis.

    0Reply
  • Susan Balcomb
    Accountant · Castle Rock CO · Member since 2018 · 3 posts · 1 vote
    6y

    Various options....

    1) Syndication

    2) Team up with a remodeling company

    3) Opportunity Zones for long term investing- An alternative for 1031 exchanges

    4) Team up with a hard money lender

    5) Hire an investment strategist to run numbers prior to investing

    Just some thoughts

    Susan 

    1Reply
  • Nicholas Mann
    Valhalla, NY · Member since 2013 · 132 posts · 84 votes
    6y

    @Casey Roman

    I’m sure it’s been repeated here 10 times over but there are multiple ways to make your money or your investing work no matter the market.

    You said your market was very high and even complete dumps went for 150k well I’m in a market where those same dumps go for 400k.

    You either overcome and adapt or fall prey and play the blame game like majority of society. Look for out of state investments or places within a 2 hour drive and I’m sure your 100k will go far. If your scared to invest, that’s fine as most of us newbies are, then just continue your education until you feel comfortable diving in. Network with other members, your friends and. Family and everyone you meet for the rest of your life and let them know that you love real estate investing and your gonna make it!!! If none of these things work to get you started in the real estate game then just simply put that

    $100k in a safe diversified stock portfolio ( All weather fund; see Ray Dalio) and expect decent gains for years to come.

    Good luck and best wishes, you control your destiny and nothing will stop you so hustle and research!!!

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

    I understand your challenge, I live in an expensive market, I am also self employed. I have helped a friend who was in your same situation writing off lots on taxes. He was able to change his financial future by reducing the write offs and after a year or two he got a loan and bought his first house. It seems counter productive, but one year of paying more taxes may allow you to get 90% financing on a property. In my market, that could be easily $900,000 that a bank is giving you to invest in Real Estate. Way more than your gonna spend on taxes.

    Of course, you could also go to bridge lenders or hard money folks but if you want cheaper money it would be better to be able to qualify for traditional financing.

    This is what all the traditional lenders said. Eat the tax bill for two years and then come back to us. This really grinds my gears...1. I'm legally entitled to those deductions 2. I'm not thrilled with how our tax money is being throw around right now 3. I have no guarantee that after two years I'll get a loan. 

    That's what landed me here. I've played by all the bank's rules (high credit, high down payment, long relationship)...I'm all for not using them in the future. 

    0Reply
  • Rich Hupper
    Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes
    6y

    @Casey Roman I feel your pain. Banks only want to lend to people with w2 income. Despite perfect credit and a career in the industry they don't care. They just want to see your monthly income will pay the PITI.

    1Reply
  • Ryan Lewis
    Contractor · Stamford, CT · Member since 2019 · 5 posts · 1 vote
    6y

    Shoot why not partner up....?

    1Reply
  • Anthony Liguori
    Rental Property Investor · NJ (new jersey) · Member since 2019 · 113 posts · 16 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.

    your a turnkey company?

    0Reply
  • Anthony Liguori
    Rental Property Investor · NJ (new jersey) · Member since 2019 · 113 posts · 16 votes
    6y
    Originally posted by @Diana Baccus:

    where at?

    0Reply
  • Joseph CacciapagliaBusiness Member
    Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
    6y
    Originally posted by @Anthony Liguori:
    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.

    your a turnkey company?
     

    No. I'm an agent at a real estate brokerage with an in house property management team. I spend most of my time helping investors find properties in San Antonio. We'll often also manage those properties, but we're not selling turnkey properties directly. What gave you that impression?

    [email protected]979-218-2286
    Joseph Cacciapaglia powered by Morty
    WebsiteView Page
    0Reply
  • Anthony Liguori
    Rental Property Investor · NJ (new jersey) · Member since 2019 · 113 posts · 16 votes
    6y
    Originally posted by @Joseph Cacciapaglia:
    Originally posted by @Anthony Liguori:
    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.

    your a turnkey company?
     

    No. I'm an agent at a real estate brokerage with an in house property management team. I spend most of my time helping investors find properties in San Antonio. We'll often also manage those properties, but we're not selling turnkey properties directly. What gave you that impression?

     I think you said something about your clients are out of state.. So thats why I asked.. Hows your market? A lot of out of state investor invest in your area?

    0Reply
  • Anthony Liguori
    Rental Property Investor · NJ (new jersey) · Member since 2019 · 113 posts · 16 votes
    6y
    Originally posted by @Danny Webber:

    non qualified mortgage assumptions. I can get you 3 properties in Austin in 1 week with 100k.

    turnkeys?

    0Reply
  • Anthony Liguori
    Rental Property Investor · NJ (new jersey) · Member since 2019 · 113 posts · 16 votes
    6y
    Originally posted by @Brian Garlington:

    @Casey Roman I'm coming to your rescue. You are NOT the only one in this predicament. As others have said...look at other Markets...I like Cleveland for my OOS Investing. Look at Chemical Bank....they have funded mortgages on properties that are as low as $35K. My bet is as a business owner if you let them know you will fund half the deal you could probably find a SFR for 50K in a C/C- Neighborhood,,,,you fund $25K of it...they give you a "mortgage" on the rest and you can get gross rents of somewhere between $800-$1,100/mo You can buy 4 of them with that $100K (DO NOT do it all at once....get your feet wet with the first one). Find an investor friendly agent like I did that walks the walk and talks the talk that also owns rentals in Cleveland....they will know the good PMs and the bad ones as well as the good contractors.

    I also flew out to Cleveland multiple times.....that obviously is difficult to do right now, but the beauty of it is that's what home inspections are for,,,,,,,get a good home inspector like I did and they will be your light. 

    That's what I did and still do.

    i love your story.. I, too am looking for out of state investments...anyone you can refer me to?

    0Reply
  • Alliya Pinckney
    San Francisco, CA · Member since 2020 · 17 posts · 9 votes
    6y

    @Casey Roman

    I would look into some of the more creative options for investing. Brandon Turner of BP actually has a really helpful book called how to invest in real estate with no (or low) money down.

    You can look into private loan options rather than commercial. Also maybe lease options? Seller financing. Home equity loan or line of credit. Maybe even a partnership with someone that CAN get a loan from the bank?

    Sounds like some of the more common options may not be possible for you, but here’s just an opportunity for you to think outside of the box and get creative.

    2Reply
  • Mario Broughton
    Atlanta · Member since 2018 · 20 posts · 4 votes
    6y

    @Casey Roman the real estate prices will eventually start to fall thanks to this economy. Look at it this way, you have $100k waiting to invest with when the right deal comes along.

    1Reply
  • Kasha Johnson
    Flipper/Rehabber · Seattle, WA · Member since 2020 · 8 posts · 3 votes
    6y

    @Casey Roman I am totally green!! I am a new investor and I am raising my capital currently. I am in Seattle and it’s super expensive here as well. I was wondering have you tried building Capital Ising a business credit building?? I haven’t seen anyone suggest this and to be honest. I wonder why?

    1Reply
  • Joshua Mathis
    Rental Property Investor · San Diego, CA · Member since 2019 · 17 posts · 10 votes
    6y

    @Casey Roman https://www.zillow.com/homedetails/409-W-C-St-Newton-NC-28658/71957708_zpid/

    Here’s a for sale by owner

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free