Am I expecting too much? Please help!

29 Replies

Hello All,

I'm looking for a legitimate lender who will provide 100% of purchase price as well as construction costs (which will equate or be less than 75% of ARV). I am new, but have partnered with an experienced Investor who has been flipping houses for years and has buy and hold properties as well. Does anyone know where I should look to obtain this, or am I reaching too high? Also, the property will be located within Prince Georges County, Maryland (or PG County) which is right outside or alongside of Washington, DC.

Please assist.

Regards,

Stephanie Dobbs

It is possible with some HML's but you have to get the property for a HUGE discount (like around 25%-30% ARV) in order for all costs to fit within the 65%-70% ARV max loan amount most HML's have. Usually they like for the borrower to have at least some "skin in the game". Perhaps your JV partner can front some of the cash in exchange for 50% of the profit on the back-end.

@Stephanie Dobbs

Stephanie, I may have missed it, but are you looking to flip or refinance?

Never will happen. Unless its your Dad.

Lenders want security. 100% is not security, its ownership.

They will also want a sure idea that you know what you are doing. No amateurs, unless you have a big stake in the game.

Originally posted by @Bret Emry :

@Stephanie Dobbs

Stephanie, I may have missed it, but are you looking to flip or refinance?

I'm looking to flip.

Originally posted by @Arlan Potter :

Never will happen. Unless its your Dad.

Lenders want security. 100% is not security, its ownership.

They will also want a sure idea that you know what you are doing. No amateurs, unless you have a big stake in the game.

Okay so what should I do? I am ready to dive into real estate but have no money yet. I have an experienced investor, but he doesn't want to put money into the deal.

Originally posted by @Stephanie Dobbs :
Originally posted by @Arlan Potter:

Never will happen. Unless its your Dad.

Lenders want security. 100% is not security, its ownership.

They will also want a sure idea that you know what you are doing. No amateurs, unless you have a big stake in the game.

Okay so what should I do? I am ready to dive into real estate but have no money yet. I have an experienced investor, but he doesn't want to put money into the deal.

If this doesn't set off a giant red flashing light in your face then it should. ALERT ALERT ALERT something is fishy here! 

If you two aren't willing to put any money up, why should anyone else?

Good point, so where should my starting point be, I have no capital...I am working to save money from my job but that's a measly $300 a month (praying no incidences come up). Please assist, don't hold back on good advice :)

Need to find an investor who will put money into the deal, or find some money of your own.  What is the investor providing - anything beyond mentorship/guidance?  

Originally posted by @Geoff Anderman :

Need to find an investor who will put money into the deal, or find some money of your own.  What is the investor providing - anything beyond mentorship/guidance?  

Nothing beyond mentorship/guidance. I could possibly ask the other mentor to provide some capital, but he's from Texas and doesn't really have much insight on the DC Metropolitan markets to feel comfortable in a deal.

See if any investors or fix and flip companies would hire you. When a person has no money, what can they provide to the investor? You need to bring some sort of service to make it worth their while. Maybe bring them a deal thats worthwhile and if it works out to get a portion of profits etc. in order to build money to get your own place. 

Another option would be to see if you could buy a duplex and rent out one side and live in another to save money. But if you only have $300 that will not get you there. 

Originally posted by @Stephanie Dobbs :

Hello All,

I'm looking for a legitimate lender who will provide 100% of purchase price as well as construction costs (which will equate or be less than 75% of ARV). I am new, but have partnered with an experienced Investor who has been flipping houses for years and has buy and hold properties as well. Does anyone know where I should look to obtain this, or am I reaching too high? Also, the property will be located within Prince Georges County, Maryland (or PG County) which is right outside or alongside of Washington, DC.

Please assist.

Regards,

Stephanie Dobbs

Hi Stephanie

I presently have 4 future real estate investors working with me, 1 has money to add to any homes he finds for me to flip. The other 3 have zero cash at this time, and have agreed to use my search methods to find homes with between 70 to 80% of ARV and give them to me for a small fee. I'm happy to teach what I do to others we have 2 deals done this year from my "bird dog's".

My hope is all 4 cut the mustard and become full time investors.  By then I will be on to the newest investment tend and will need strong well trained investors under me to handle bigger more complexed deals.  Just keep working, understand you have little to add, your attitude is what would get you a second look from me.  I want people on my team that make us better, that make us learn and find more deals.  Real Estate investment clubs are a good place to find that.  Stand up and the end of the club meeting and tell the room full of investors what you want.  You may get it!!!

Originally posted by @Jim Keller :

My hope is all 4 cut the mustard and become full time investors.  By then I will be on to the newest investment tend and will need strong well trained investors under me to handle bigger more complexed deals.  Just keep working, understand you have little to add, your attitude is what would get you a second look from me.  I want people on my team that make us better, that make us learn and find more deals.  Real Estate investment clubs are a good place to find that.  Stand up and the end of the club meeting and tell the room full of investors what you want.  You may get it!!!

 Thanks so much, I just looked up meetups and found two that are in July and I will do exactly what you stated! And I would gladly hear what you've taught the others for me to get the information to get at least a wholesale deal or something to build capital to effectively fix/flip and hold houses.

The $300 you saved this month would probably pay for a real estate agent class.  Next month's $300 would pay for the exam.  The month after that, business cards and incidentals as you start working part-time for a broker.

You will have MLS access and the ability to truly learn your market. Spend your first couple of commissions putting some skin in the game for a flip.

Originally posted by @Mike Huang :

Have you heard of this website? Take a look and it may help, depending on if you're comfortable with using crowdfunding.

https://www.fundthatflip.com/

Thanks so much Mr. Huang! I will definitely check that website out! Have you ever used such website or know someone who's achieved success using this website?

Stephanie Dobbs

Originally posted by @Richard C.:

The $300 you saved this month would probably pay for a real estate agent class.  Next month's $300 would pay for the exam.  The month after that, business cards and incidentals as you start working part-time for a broker.

You will have MLS access and the ability to truly learn your market. Spend your first couple of commissions putting some skin in the game for a flip.

Thanks Mr. C, I was actually thinking of doing that!

Hi Stephanie,

There are lenders that lend 100% but the deal has to be closer to 65% of the ARV. Another option for you is to present an equity split with a local rehabber so that you can shadow the process. So basically you would defer your wholesaling/finder's fee for the property for a small equity share and the opportunity to see the process behind the scenes. I know a couple of seasoned rehabbers who offer this for the right property.

Originally posted by @Odis Griffin :

Hi Stephanie,

There are lenders that lend 100% but the deal has to be closer to 65% of the ARV. Another option for you is to present an equity split with a local rehabber so that you can shadow the process. So basically you would defer your wholesaling/finder's fee for the property for a small equity share and the opportunity to see the process behind the scenes. I know a couple of seasoned rehabbers who offer this for the right property.

Mr. Griffin, that is an excellent idea! Please pass on the contact information of those rehabbers if you are willing to.

Thanks,

Stephanie

Originally posted by @Stephanie Dobbs :
Originally posted by @Arlan Potter:

Never will happen. Unless its your Dad.

Lenders want security. 100% is not security, its ownership.

They will also want a sure idea that you know what you are doing. No amateurs, unless you have a big stake in the game.

Okay so what should I do? I am ready to dive into real estate but have no money yet. I have an experienced investor, but he doesn't want to put money into the deal.

 so you have no money  have an experienced investor that doesn't want to risk it, but you wonder if a bank will?

this does not make any sense.

Originally posted by @George P. :

 so you have no money  have an experienced investor that doesn't want to risk it, but you wonder if a bank will?

this does not make any sense.

I'm not asking for a bank but someone that will finance. I know this is not a situation where a bank is willing to go forward, but rather someone that will see what I put together, will see the experience that my partner has (to have faith that this can get done), and will see the potential to earn interest on the money lent in a short period of time. I am passionate and professional, but I am new and without funds right now. I am willing to learn and have reached out to experienced investors to shadow them and learn the industry effectively to not much avail, except for the offer from this investor (to acknowledge whether all the information makes sense and verify the numbers and contractors used for half of the equity/profit in the deal).

Either start smaller or partner with existing rehabbers in your market on their projects.  Either way, get your own experience. Then all you need is the money, right now you dont have either and asking others for all of it. 

@Stephanie Dobbs

 This is a "slow" wealth building business. It is not a get rich "quick" business. Some people have been very lucky and hit home runs right out of the gate but most lose money on their first flip. I would say take your time. Real estate isn't going anywhere and there will always in any market be deals out there. Fools rush in!

Find your core strengths. What value do you bring to the game today? Take those strengths and help others in the area that are lacking in those areas. It could be something as simple as having free time. You may have time to offer to an investor to do things they do not have time for. I am mentoring a guy right now and he had 0 money, 0 knowledge but loads of time and desire. He couldn’t even change a door knob 8 months ago! Since we have started he has flipped a house (profitable) and purchased 6 rentals with a partner. All with none of his own money! It can be done you just have to be fully committed and ready to do whatever it takes. Again take your time, listen, learn and by all means make sure what you’re doing feels right. If it smells fishy then it’s a fish!  

Originally posted by @Jason James :

@Stephanie Dobbs

 This is a "slow" wealth building business. It is not a get rich "quick" business. Some people have been very lucky and hit home runs right out of the gate but most lose money on their first flip. I would say take your time. Real estate isn't going anywhere and there will always in any market be deals out there. Fools rush in!

Find your core strengths. What value do you bring to the game today? Take those strengths and help others in the area that are lacking in those areas. It could be something as simple as having free time. You may have time to offer to an investor to do things they do not have time for. I am mentoring a guy right now and he had 0 money, 0 knowledge but loads of time and desire. He couldn’t even change a door knob 8 months ago! Since we have started he has flipped a house (profitable) and purchased 6 rentals with a partner. All with none of his own money! It can be done you just have to be fully committed and ready to do whatever it takes. Again take your time, listen, learn and by all means make sure what you’re doing feels right. If it smells fishy then it’s a fish!  

Thanks so much! You said a lot of great points in your reply, and one of which is having time. I've offered some time to investors (2 to 4 hours a week), which I can increase in July and August. No one has taken me up on my offer yet. So if there are any takers, please contact me via message, as Mr. James said it best, I need exposure to experience!

Thanks again Mr. James!

Stephanie

Originally posted by @Bryan H. :

Either start smaller or partner with existing rehabbers in your market on their projects.  Either way, get your own experience. Then all you need is the money, right now you dont have either and asking others for all of it. 

Thanks, you are right! I am trying not to be greedy and am being honest about not having experience or money. Your approach is correct, and I've solicited services to other experienced investors (even put a post on BP asking to yield 2 to 4 hours a week to administrative or any tasks that I can assist with). The reason for the short time is due to the fact that I work full time and have three young children. I can extend the time in July and August though.

Stephanie Dobbs

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