From time to time, another hard money lender that we know has a list of properties that he circulates to investors. These are properties that this lender has had to foreclose on due to non-payment on the loans. One of these properties that the lender circulated on his list was picked up by a new real estate investor I know. This real estate investor just starting doing real estate investing in 2012, and has one successful rehab flip under his belt.
The house he bought from the lender was a half completed rehab. Another real estate investor bought the house at auction and used the other hard money lender to make a loan on the purchase. The house ended up needing a lot more work than the investor originally budgeted for. After several missed payments and the house only halfway fixed up, the hard money lender foreclosed on the house.
The new real estate investor bought it from the other lender and used our company to obtain a rehab loan on it. The house still needed another $10,000 to finish the renovations. Within 2 weeks the new investor had the house finished and appraised. He decided to list it at below appraised value and within 1 week he had multiple offers on the home. Only 5 weeks after buying the property from the other hard money lender, the new real estate investor had finished the house and sold it making $16,000 in profit on it! This is only his second real estate deal, so not a bad profit for only having one other deal under his belt.
Congratulations to the new investor!
Strange that this HML didn't want to simply do the rehab and keep the profits for themselves.
Most lenders just want to make a loan to an experienced real estate investor and make money that way. Being a real estate investor takes a lot of years of hard knocks. Many lenders don't want that learning curve but would rather count on a professional. In this case, we went out on a limb with this inexperienced father/son partnership but all of the right ingredients were there so we took a chance.
Nice to hear success stories! Way to go!
Thanks @Ann Contorno ! Yes I'm pretty happy for them.
Ha, at first I thought that you were talking in the 3rd person like Bob Dole hahaha.
Congrats to him as well!
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