I want to get into real estate ASAP so I am looking for deals to put together to present to some private lenders (family members). Do you all have any tips I can use when gathering and presenting my deal??
You'll have two main questions to answer: What's in it for them, and what have you done to make up for the fact that you're brand new?
What are your answers to those questions?
@Ree Rolle to build on @Taylor L.’s post, I have A few other questions you should be able to answer. How well do you know your market? Have you done all of the research needed to invest in real estate with family member’s money? Real estate is a marathon. Not a sprint. Don’t rush in thinking you’re going to make money quickly. If you go in before you’re ready, you’ll lose money.
@David Abbate yes I know that’s why I’m asking these questions so that I can have an idea of what direction I need to take. I have some insight on the financial part. I am slowly beginning to learn the market here in Chicago.
When learning the market what exactly am I learning? I’m familiar with what areas are A-F, but I’m sure it’s much more to that.
@Ree Rolle learn the rents for your target areas, learn what a freshly rehabbed house sells for in different areas. Learn how much different rehab tasks cost. What contractors can you use that you trust?
What's in it for them would be the interest terms and points paid back. It's an investment for both parties really. I will have done the BRRRR method and they will have made interest on the xxxx amount.
Also, I have been studying real estate for the last 2 years now and have really taken off in the last couple of months. I have been studying opportunity zones in Chicago and I’m confident on what areas are really appreciating in value right now.
Good questions though! What other type of questions?
I am still learning the market but I do have some knowledge. I am familiar with opportunity zones in my city. There is so much more to learn than that though.
@Ree Rolle if these folks aren't interested, what's your backup plan?
I’m not familiar with Illinois. Hopefully someone with more experience in the area chimes in.
What you need to do first is identify what a deal looks like in your market. What are local rents? How much do properties go for in what neighborhoods? What are the days on market in your area (when renting and selling)? What types of finishes are common in your area? How’s much would a contractor charge to get install those finishes?
I’m sure there are plenty I’m missing. But, these are some basic questions you need to figure out so that you can identify a deal and what isn’t a deal.
Then I will keep trying with different lenders. I will also consider doing an FHA owner occupied loan if I have too. The goal is to go in 100% financed.