Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y
This is quite a hot topic these days with the deal of day how to get into deals with none of your own money.. I get approached on this pretty much daily..
And I have my first two going now... But caveat.
I would only do them under the following conditions.
1. rehabber is personally known to me and is very very experinced
2. First lender is known to me and I can take over if needed.
3. for now only deals I can drive to incase I have to take over .
I don't know your capacity but on the face of your post it looks like to me you have tied up property you know you can't hard money loan but need the down payment and interest reserves or payments and you will use non of your own money.
So the only value proposition you bring is you found the deal and will marshal it but you have no skin in the game other than time.. that is the hurdle you need to over come.
Personally since I am the person your looking for I would not do this for someone who is knew.
So to that end I would be looking for a equity partner FIRST.. get some deals and experience then you can go fishing for gap.. you can show them your done deals and your success's. and you will have some capital to put in even if its nominal.
so this Gap theme is just soup de jour for I have no money and trying to do no money down 100% leveraged deals.
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y
This is quite a hot topic these days with the deal of day how to get into deals with none of your own money.. I get approached on this pretty much daily..
And I have my first two going now... But caveat.
I would only do them under the following conditions.
1. rehabber is personally known to me and is very very experinced
2. First lender is known to me and I can take over if needed.
3. for now only deals I can drive to incase I have to take over .
I don't know your capacity but on the face of your post it looks like to me you have tied up property you know you can't hard money loan but need the down payment and interest reserves or payments and you will use non of your own money.
So the only value proposition you bring is you found the deal and will marshal it but you have no skin in the game other than time.. that is the hurdle you need to over come.
Personally since I am the person your looking for I would not do this for someone who is knew.
So to that end I would be looking for a equity partner FIRST.. get some deals and experience then you can go fishing for gap.. you can show them your done deals and your success's. and you will have some capital to put in even if its nominal.
so this Gap theme is just soup de jour for I have no money and trying to do no money down 100% leveraged deals.
Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
10y
I completely agree with @Jay Hinrichs on this one, @Brian Collins. Second position loans are always risky, and since your profile does not indicate any experience whatsoever, this becomes particularly true. Writing, "Buyers are liars" is a clever alliterative catch phrase, which is just an excuse that skirts the issues. Why would any business person make a broad statement like this, effectively cutting off their source of potential customers?
There are many experienced flippers in Los Angeles with adequate money, the requisite experience, ethics you can respect, and always buying viable properties. If these deals are viable, you should have no problem selling them for a fair profit. If you haven't been able to sell them, then this either points to your inexperience forming the appropriate contacts (which is expected when you're getting started) or they are simply not the deals you think.
I'm trying not to be harsh here, but for every buyer who is a liar, there is an enthusiastic wholesaler just getting his or her feet wet. As lenders, we see this as observers and it's a shame. In fact, we've been given explicit instructions not to send or refer any wholesale deals by the majority of our borrowers. That is, none of the serious flippers we know are even willing to invest their time anymore. And, now that we're advertising to potential customers using pejorative catch phrases, it appears the mutual trust is gone.
If you truly have some good deals here, Brian, and really believe anyone who buys them is a liar, then you ought to take Jay's advice and find an experienced partner willing to help and train you. I imagine you've received several PM's already. With credible comps and accurate rehab estimates (which you do have to be able to say these are viable, yes?) he or she should be able to do a financial evaluation in just a couple of minutes.
If you can get over dealing with someone who's perhaps even a serious buyer, and can realistically show enough meat on the bones, you should have no problem selling these properties. Asking anyone to provide 100% financing, when you've never done this before, is asking them to take an unreasonable risk that few experienced lenders would or should do.
Flipper/Rehabber · Fairfax County, VA · Member since 2016 · 15 posts · 6 votes
10y
Jay, you are exactly right. As a lender and an experienced rehabber, I would only lend to someone on the conditions you have laid out. Bringing "workers" to a deal is no deal to me, since I know that having the right people doing the work is EVERYTHING to making it successful, and I have my own successful formula for finding and working with the appropriately skilled and experienced professionals. Most people who are new to renovating make their biggest and most expensive mistakes in choosing the wrong people to do the work and not knowing how to supervise them properly, and being ignorant on how to manage a budget. I would never lend to an inexperienced person, no matter how great the "deal" is.
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y
@Jeff S. you can add me to the list of not really wanting to hear from wholesalers..
I closed one today.. in Charleston but that is rare for me.. too much throwing stuff up on the wall and see what sticks from those folks. granted they can bring some deals.. but anyone contacting me wanting to put me on their buyer list I really don't respond to.
What ever happening to apprenticing in the industry to build up capital and experience I guess the internet has given this illusion.
now granted in some markets were you can trade houses like your trading cars it can be done.
but in the higher priced markets pretty darn tough without some expeirnce and some jingle in your designer jeans.
Wholesaler · Los Angeles, CA · Member since 2015 · 43 posts · 6 votes
10y
@Jay Hinrichs,
Thank you for your feedback. I'm very excited all the feedback! I focus on developing and rehabbing. I have been in business 9 years. I currently have 2 projects in beginning stages. One at 50% complete.
I'm just looking for the real deal. My money is invested in my deals. We still get a lot of acceptances and can not take them all. How, we would like to network and leverage to accommodate. If you can give me a call, I would love to go in further details.
