Real Estate Investor · Chula Vista, CA · Member since 2010 · 2 posts · 1 vote
If you have little to no experience with rental property (just bought a book on landlording) and had $100,000 to invest only in real estate, where and how would you invest it?
1. buy as big a multi unit complex that you could qualify for (leaving some left for misc expenses of course)
2. buy a few properties in different locations?
3. or just pay off 60% of your mortgage balance.
Any other options I am forgetting in real estate only (I am already heavily invested in the stock market).
Flipper/Rehabber · Louisville, KY · Member since 2008 · 1k+ posts · 1k+ votes
15y
Originally posted by Financexaminer:
None of the above, look into transactional funding. Think about the velocity of your money, turning say 3% 10 times a month.
But if you want to be a landlord.....you must want to work harder. Good luck
First of all, you can't make 3% any more. 2 if you are lucky and usually less.
Second, you aren't going to turn your money 10 times a month. Back to backs are getting tougher to put together. With alot of marketing you might (big emphasis on might) get to 10 transactions a month but it won't be 10 100K transactions.
Also, he would have to turn down alot of possible deals because they are over 100K.
It is a good business but luring him with 30% monthly returns is ridiculously pie in the sky.
In my experience, the reality is 2 or 3 transactions a month for 1.75%, but I don't make it my full time business.
Investor · Houston, TX · Member since 2008 · 167 posts · 44 votes
15y
Here's an option that I think would limit risk and have great upside considering the economic time. I'm familiar with both the Texas and Atlanta markets, so this is what I've seen.
If you there was someone you trusted to partner with limit your time and help limit your risk and partner up with them. Preferably someone that has experience being a landlord, but also understands the power of owner financing and it's many benefits.
There are many buyers that still want to buy property, but can't get financed. You can become the bank and there are buyers willing to put 2500-10k down depending on the deal. Their mentality is much different to that of a tenant. They have "ownership" interest.
Think about when you rent a car...generally speaking how do we care for them? Not very well compared to if its "your" car.
Someone else mentioned transactional funding. It's simple as well, but does come with some level of risk depending on who it is you're doing the funding for and who the end buyer is and their dependability. Do your due diligence on these 2 things, how the title company handles the funding, and any potential issues that may hold up a double close.
If you do not have experience with wholesale transactions then you'd definitely need to learn a bit about it then see a couple transactions to understand how they work.
I am still confused with what transactional funding is all about. I agree today it would be impossible to get that magical 3%. Being a landlord is a big challenge in itself.
Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
15y
Here is the problem with the majority of these posts; the posters don't reside in California. San Diego is an expensive market and $100K isn't going to buy you ANY rentals. It is a good start on a down payment, but even then, it won't be a deal that makes any sense.
Originally, I would have suggested taking 1/2 of it and sticking it someplace safe. Then using the other 1/2 and partnering with rehabbers/flippers as their 'money partner' for a better cut than a few points and interest. However, seeing that you reside in CA, $50K isn't going to get you in on any deals.
If you want to put your money to work at 9-12% with no points, but in a much safer position, contact The Norris Group in Riverside. He is an extremely reputable hard money lender and will use your money to broker a loan. Then head over to SDCIA at the Scottish Rites Center in San Deigo where you can learn all about real estate at a safe investing club. No sales pitches and lots of great speakers.
Real Estate Investor · NowWhere, WI · Member since 2009 · 135 posts · 25 votes
15y
Originally posted by Aaron Mazzrillo:
Here is the problem with the majority of these posts; the posters don't reside in California. San Diego is an expensive market and $100K isn't going to buy you ANY rentals. It is a good start on a down payment, but even then, it won't be a deal that makes any sense.
Originally, I would have suggested taking 1/2 of it and sticking it someplace safe. Then using the other 1/2 and partnering with rehabbers/flippers as their 'money partner' for a better cut than a few points and interest. However, seeing that you reside in CA, $50K isn't going to get you in on any deals.
If you want to put your money to work at 9-12% with no points, but in a much safer position, contact The Norris Group in Riverside. He is an extremely reputable hard money lender and will use your money to broker a loan. Then head over to SDCIA at the Scottish Rites Center in San Deigo where you can learn all about real estate at a safe investing club. No sales pitches and lots of great speakers.
As I was reading this thread, the Norris Group came to mind also. They are just about the most reputable HML in all of California.
Investor · Houston, TX · Member since 2008 · 167 posts · 44 votes
15y
Ah yeah didn't realize he was in California. Definitely, a different animal out there. Aaron's suggestion is great to put your money for work for you. Aaron..what type of hard money terms do you guys see in California?
Specialist · Cleveland, OH · Member since 2011 · 1k+ posts · 852 votes
15y
James, not sure where you are, but in Cleveland, You can buy a nice home for less than 20k that will pay out more than 1k per month sec. 8. With that said, I would buy a couple of decent properties, bank a little for a rainy day, and flip contracts to get your coin back! Just my opinion. Good luck, and congrats on your 100k! :mrgreen:
Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
15y
Originally posted by Manesh Hardeo:
Aaron..what type of hard money terms do you guys see in California?
The Norris Group has two programs available now:
Straight hard money - 12.5% Interest only, 3.5 Points, due in 1 year, no Prepay, up to 60% of ARV
Long Term: 9.9% Interest only, Due in 8 years, 3.5 Points, Prepay, up to 60% of ARV. This program is for investors wanting to hold rental properties. I have used this repeatedly and there is no maximum amount you can borrow.
Real Estate Investor · Arlington, TX · Member since 2011 · 10 posts · 0 votes
14y
Reviving the slightly old topic.
Bill Gulley, I have read several of your posts with regards to transactional funding. Are you involved in hard money lending? I have few questions:
If I lend 100k at 12%, 4 points for a 6 month term. Each point is 1K. Does this mean that I will get 4K at closing?
Who will get the loan origination and closing cost fee? title company?
You've mentioned short term loans. Most rehabbers look for 3-6 months term. Who would be in a market for a short term loan? If not rehabbers, is it not riskier since there is no hard asset collateral?
Is there a market for selling these notes at a discount? I am more interested in points and selling off the note.
Thanks in advance. I am in Dallas area, other please jump in if you have any info.