hard money success story
I wanted to share this with the forum for a few reasons...first, to show newbies how possible it is with hard work and determination...second, to thank everyone on Bigger Pockets who has helped me so far..i know i will still have a long way to go, and this is by no means a how-to guide, as i made several mistakes along the way!!! however, what saved me from being upside down at the end of everything was that i bought at the right price..if you can remember to do that, to not get itchy for a deal and just do a deal bc you want to, if you can show the patience and skill to get the right deal at the right price, then you can be successful!!! now on to the deal...
I purchased a 4 unit property in mid november for 53,500. At the time, I thought it needed about 10,000 of work. Using a hard money lender I came across here (thanks BP), I was able to fund the deal. QUICK NOTE ON HARD MONEY LENDERS FOR NEWBIES....you will need to verify income and credit, and probably put down 10% as i had to do...i do not know of any lenders willing to wire you cash w/o seeing your income and credit, and without you having money in the deal..if you know of some, pm me!! :mrgreen: :mrgreen: :mrgreen: My application had to of been at least 30 pages with bank statements, specifics on my past deal, a statement on my expertise, and my father's (i use him for construction contacts as he's been building homes since before i was born), etc...there was a ton of paperwork, and it didnt' fund in 2 weeks..this took a month or 2 to set up. After getting into the rehab, there were a few extra things that I could do the cheap way or the right way...i decided to look for a partner for extra money...after a while i came across someone who would fund the rest of the rehab costs for 40% of profits...not ideal, but i wanted this to be done right, and so i settled for this. After all is said and done, the rehab plus holding costs will be around 20,000. Add that to the 53,500, I'm in for 73,500. The reason I didn't write this months ago was bc I did not consider this a success until I had the appraisal finished and had this refinanced. The appraisal came in at 120,000. The bank is starting the refinance process, and should be completed within a few weeks. 1 unit is rented at 450. I have received plenty of calls on the other 3, but no one that I felt comfortable with, for various reasons. I have found winter, esp. the holidays, is a very tough time to find tenants. Hopefully, another unit or 2 will be rented soon though, as I do get calls daily on the units. I learned a lot on this deal, and as a result, I will have to give up 40% of my profits one day whenever I sell. However, I preferred to do the rehab the correct way, as I said. I am currently looking for my next deal to fund through hard money again, as I have developed a good relationship with my banker, and he will be ready to refinance again. thanks for reading, and good luck to the other nexbies....