Lender / Real Estate Investor from Chicago new to BP

22 Replies

Hello BP Family!

My name is Fernando Angelucci and I am excited to join the community.

Here is a little about me and what I want to accomplish:

In my lending business, I will be increasing my portfolio to $20M in capital within the next 5 years to grow Titan Capital into a private investment fund. I then look to grow my fund into a $100M fund within 10 years to parlay the growth into the banking industry.

In my self storage business, I am focusing on acquiring an additional 40 self storage facilities in the next 10 years with the goal of either taking Social Self Storage public or being acquired by a self storage REIT.

In my real estate investment business, I will be growing my portfolio to include an additional 500+ units in the next 5 years to hedge against inflation and to balance my lending business.

In my wholesale business, I am currently working on automating the Chicago and Indianapolis markets to completely remove myself from the business within the next 18 months and will be scaling up to 10 properties sold per month per market.

I am always looking for solid long-term business relationships, be it with experienced real estate investors who are in need of capital, equity partners looking to get a solid return on their money, strategic joint venture partners who are growth oriented, or foreign investors looking to hedge their U.S. currency holdings against inflation through the acquisition of U.S. cash flowing assets.

Shoot me a line and lets start making some money together! There is more than enough to go around!

Cheers!

Nice to see you here.

I'm sure that the skillset you bring to the table, along with "product" will make you a popular addition to the site.

Enjpy,

John Rogers

@Fernando Angelucci

Welcome to Bigger Pockets. Thanks for bringing experience with you.

At the bottom of this page is a list with help in it. Click on help. You will see answers to questions that you didn't even think of.

Looking forward to sharing insights with you in the forums.

                              Enjoy as you prosper.....

@James Wise Thank you for the kind welcome! How is Cleveland treating you these days?

@Brie Schmidt Hello! Tell me about your operation, anything I can do to add to your business? We are constantly looking for Self Storage and MF in Chicago. Have you seen anything good recently?

@John Rogers Thank you John!

@Jerry Stanford Hello Jerry! I am always looking to connect with investor oriented brokers. Anything I can do for you?

@Jeff Goedeker Hello Indy! Jeff, tell me about your operation? Where do you focus your efforts in Indy?

@Renea Steward Hello and thank you for the advice, you were right, they have everything in there! What parts of Chicago do you focus on?

@Sterling White I do have property in the Indy market and am about to add much more to our pipeline. We are currently getting two apartment buildings for sale. We will also be sending out a 15,000 piece mailing campaign to the Indy market here over the next few months. Should be great!

@Cynthia Scaife Hello! I love Texas! We will be expanding our operation to DFW towards the end of next year. Any tips?

Cheers!

@Fernando Angelucci - I'm a buy and hold investor on the North side of the city.  I have my own brokerage business working with other buy and hold investors.  I don't do self storage, but I can keep an eye out.  Account Closed might have some leads on self storage?

Originally posted by @Fernando Angelucci :

@James Wise Thank you for the kind welcome! How is Cleveland treating you these days?

Cleveland is treating me well. As expected out of the greatest location in the nation.

@Fernando Angelucci - I am an independant investor.  I have 59 units with my husband and another 21 with partners.  As far as what I look for and how I decide...  it is all in my head.  A lot of it is gut instinct at this point.  

Originally posted by @Fernando Angelucci :

@Brie Schmidt  That is fantastic! What is the size of your current portfolio? What types of properties do you look for and how do you evaluate them to decide if it is a good deal or not? Thank you for the recommendation! @Wendell De Guzman How long have you been in the Self Storage Business?

 Fernando, I am not in the Self Storage business. I encounter deals all the time - of different property types. I have built a good acquisition team that finds and attracts good deals. A lot of these deals are SINGLE FAMILY homes, some are apartment buildings, some are commercial properties and once in a while, we encounter mobile home parks, self storage, land, etc. Other investors approach me for deals basically and I sometimes just sell these deals outright,  joint venture with them on these deals or I buy these deals myself.

@Chris Soignier Wendell, that is fantastic news. I am buying almost everything you mentioned. The only things I am not currently buying are industrial land, retail space, and office space. Everything else is right up my alley. What areas do you find these properties?

I see you are from Downers Grove. I basically grew up in the Main and Ogden area! Go Trojans!

@Joe Fairless Hello Joe, thank you for the welcome. Got to say, I love what you are doing with your podcast, keep up the good work!

I don't really look at which one is the "most profitable" in and of itself but rather which produces the most passive income with the least amount of liability and daily involvement.

The lending business is great because I do not use any of my own funds, I am in the safest part of the equity stack, the investor takes all the risk with the rehab, and does all the work. 

The real gem of lending is rehypothecation. The following example will show why:

Let's say I have a capital source that costs me 10% APR from Larry the Private Lender. I take 50K at 10% and lend it to a Frank Flipper at 12% and 5 points for 6 months. I am able to turn my money twice a year, so therefore, I am making 12% and 10 points = 22% a year. So I am making a 12% spread or $11,000 - $5,000 = $6,000 a year. Not bad but not great. Here is where the magic happens.

When I lend Frank Flipper the 50K against his property that is currently worth 80K, he gives me two things, a Promissory Note (IOU) and a Security Instrument that secures the Note (Mortgage or Deed of Trust). I can then take the Security Instrument to Paul the Private Lender and say, "Paul, I have a 50K Mortgage on a property worth 80K and once it is done it will be worth 160K, are you willing to lend me money in exchange for holding this Mortgage?

The nice part is the new lender Paul is not looking at my credit profile or reserves, he is looking at the borrower who is on the Mortgage, Frank.

So Paul the Private Lender says absolutely and lends me 50K at 10%, I then go out and lend it to another flipper at 12% and 5 points and turn it twice in a year now adding another spread of $6,000 profit a year to get to $12,000 a year total. Again, not bad but not great. But then I can do it again with the new Mortgage, and again, and again.

I know Hard Money Lenders that rehypothecate their loans between 10 to 20 times. So imagine I do it 20 times to really drive the point home. I now have $1MM at 10% and am making loans out at 22%.

That is 220K - 100K = 120K a year in spreads from starting with just one 50K loan at 10% APR... Amazing! This is how the 0.1% of the US make their money, they are called banks.

Now say I spend $3,000 to get the entity formed and to have my team put everything in place before my first loan, because after my first loan, the borrower pays for all of my expense, including appraisals, BPO's, Prelim Title Reports, etc.

120K on 3K in the first year is a 4,000% Cash on Cash Return. All while shifting all the risk to the borrower, using other peoples money, and not using any of my own credit...

I apologize for the long post, but this stuff gets me jazzed up and I think everyone should know about this.

Cheers!


I don't really look at which one is the "most profitable" in and of itself but rather which produces the most passive income with the least amount of liability and daily involvement.

The lending business is great because I do not use any of my own funds, I am in the safest part of the equity stack, the investor takes all the risk with the rehab, and does all the work. 

The real gem of lending is rehypothecation. The following example will show why:

Let's say I have a capital source that costs me 10% APR from Larry the Private Lender. I take 50K at 10% and lend it to a Frank Flipper at 12% and 5 points for 6 months. I am able to turn my money twice a year, so therefore, I am making 12% and 10 points = 22% a year. So I am making a 12% spread or $11,000 - $5,000 = $6,000 a year. Not bad but not great. Here is where the magic happens.

When I lend Frank Flipper the 50K against his property that is currently worth 80K, he gives me two things, a Promissory Note (IOU) and a Security Instrument that secures the Note (Mortgage or Deed of Trust). I can then take the Security Instrument to Paul the Private Lender and say, "Paul, I have a 50K Mortgage on a property worth 80K and once it is done it will be worth 160K, are you willing to lend me money in exchange for holding this Mortgage?

The nice part is the new lender Paul is not looking at my credit profile or reserves, he is looking at the borrower who is on the Mortgage, Frank.

So Paul the Private Lender says absolutely and lends me 50K at 10%, I then go out and lend it to another flipper at 12% and 5 points and turn it twice in a year now adding another spread of $6,000 profit a year to get to $12,000 a year total. Again, not bad but not great. But then I can do it again with the new Mortgage, and again, and again.

I know Hard Money Lenders that rehypothecate their loans between 10 to 20 times. So imagine I do it 20 times to really drive the point home. I now have $1MM at 10% and am making loans out at 22%.

That is 220K - 100K = 120K a year in spreads from starting with just one 50K loan at 10% APR... Amazing! This is how the 0.1% of the US make their money, they are called banks.

Now say I spend $3,000 to get the entity formed and to have my team put everything in place before my first loan, because after my first loan, the borrower pays for all of my expense, including appraisals, BPO's, Prelim Title Reports, etc.

120K on 3K in the first year is a 4,000% Cash on Cash Return. All while shifting all the risk to the borrower, using other peoples money, and not using any of my own credit...

I apologize for the long post, but this stuff gets me jazzed up and I think everyone should know about this.

Cheers!

 No - you should not reveal these "secrets" as you're creating more competition. :-)

The above is the reason why I am lending money now as well.

Wendell, that is fantastic news. I am buying almost everything you mentioned. The only things I am not currently buying are industrial land, retail space, and office space. Everything else is right up my alley. What areas do you find these properties?

I see you are from Downers Grove. I basically grew up in the Main and Ogden area! Go Trojans!

 We buy them all over Chicagoland - Dupage, Will, Cook, Lake & Mchenry counties.

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