New member in MD

14 Replies

Hello!

My name is Tamara and I am new to real estate investment. In the past I have been a realtor as well as a landlord for the last 10 years. Now I'm looking to buy, fix and resell properties in the DC metro area. My focus is single family homes and single family homes that can be converted into condos.

Currently I am trying to figure out how to buy properties at wholesale as well as how to get my first project financed. So far I've been told my projects are too small and another lender has a ton of hoops for me to jump through. If I have to jump those hoops, I will because I'm trying to use hard money only as a last resort (rates are high 10-15%). Any advice out there for a newbie on how to buy properties at the lowest price and how to secure financing would be greatly appreciated.

Finally, I'm really excited to be part of such a vibrant community of real estate minded people. I find it energizing and that helps to keep me energized as well! I'm looking forward to being a part of the BP community.

Tamara

Welcome to BP @Tamara V. . I would actually just recommend using a hard money lender. Yes the interest rate is high, but your goal needs to be in and our out of the project in like 120 days. If you amortize the closing costs of a traditional loan over that short of a time frame, you will be surprised what your interest rate would actually look like. Also you should be looking at projects where the points and interest on a HML are not really going to affect your return all that much.

Welcome to BP @Tamara V.  

Hard money is expensive but if it helps you do a profitable deal that you can't get done otherwise, it still makes sense. You  need to simply figure the cost of hard money  into your deal evaluation when you make your offers to buy. 

Would you consider doing a partnership with a silent money partner? If you would keep in mind that giving a money partner 50% of a deal is probably more expensive than hard money.

I believe it is safe for the beginning investor to learn how to control real estate with a delayed settlement contract with right of possession and subject to assignment to a third party during the delayed contract period (you can delay a settlement for as long as you want, 2 months, 2 years or longer), when you have the "right of possession", you have an opportunity to fix it up, put it on MLS, have an auction or assign your rights to someone else for more money.

Control is the key word here.

Charles

Originally posted by @Todd Gilfoy :

Congrats @Tamara Verrett on joining BP!! Why Large Apartment Buildings specifically?

 I'm actually not interested (yet) in apartment buildings. I'm starting on the small to medium side with SFRs. Getting my feet wet. I'd actually like to know of any wholesale opportunities in DC.

I have a couple of hard money lender names. I just need a property. I'm looking in Eckington, Brookland, Capitol Hill, Lincoln Park, Anacostia and other parts of SE DC.

Originally posted by @Ned Carey :

Welcome to BP @Tamara Verrett 

Hard money is expensive but if it helps you do a profitable deal that you can't get done otherwise, it still makes sense. You  need to simply figure the cost of hard money  into your deal evaluation when you make your offers to buy. 

Would you consider doing a partnership with a silent money partner? If you would keep in mind that giving a money partner 50% of a deal is probably more expensive than hard money.

 You may be right. I think being new to this I'm concerned that the the hard money lender is some sort of hadowy figure with henchmen. I just need to get acclimated to it all.

Originally posted by @Tamara V. :

I have a couple of hard money lender names. I just need a property. I'm looking in Eckington, Brookland, Capitol Hill, Lincoln Park, Anacostia and other parts of SE DC.

 Of the areas you have mentioned, other than Anacostia and other parts of SE DC, you are unlikely to find a wholesale deal.  The former areas you have mentioned are very hot, and there is no reason a seller would not just list their property to sell to get top dollar in those areas, no matter how in disrepair the property is. Even if by chance that there was wholesale deals to be had, there would be literally dozens of people offering to buy all cash with under 5 days to close with absolutely no contingencies.

Originally posted by @Russell Brazil :
Originally posted by @Tamara Verrett:

I have a couple of hard money lender names. I just need a property. I'm looking in Eckington, Brookland, Capitol Hill, Lincoln Park, Anacostia and other parts of SE DC.

 Of the areas you have mentioned, other than Anacostia and other parts of SE DC, you are unlikely to find a wholesale deal.  The former areas you have mentioned are very hot, and there is no reason a seller would not just list their property to sell to get top dollar in those areas, no matter how in disrepair the property is. Even if by chance that there was wholesale deals to be had, there would be literally dozens of people offering to buy all cash with under 5 days to close with absolutely no contingencies.

And that has in fact been my experience. I came really close on a great property in Capitol Hill but it was gone in less than 24 hours. SE is where I see some potentially nice opportunities but hey, I'm open. 

Alexandria is a nice area that is just outside DC on the west side. It's not cheap but there are new town home and apartment communities popping up everywhere.

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