All Forum Posts by: Austin Hughes

I'm fairly new as well.

At this phase, I am just telling people who have identified themselves as wanting to lend to REI's what my operations will look like, and then see what they are looking for to see if there's a way we can work together.

Common things I ask for are: Equity or interest payments? Asset based (property) or Credit Based? What is your percentage (interest or equity)? What loan to value do you lend on? Are there up front fees, or are you willing to load them at the back, when the house sells?

Typically, the investors either want to lend on flips of single family homes or 2-5 year holds on commercial real estate (apartments).

Once people have a proven track record as a flipper or general investor, then the script flips in conversations with private equity people. The flipper gets to set their rates and terms that the investors get. Usually, at this phase, there is a pool of investors who take equity in each deal, and expect the same return regardless of how the property does. At this point, the flipper has more freedom to move on a deal with their funds than he would at the beginning of his business career.

@Travis Gray

Welcome! Jonathan and Gary are great guys and doing well in their investing.

Lubbock is steady eddy as far as housing is concerned. A lot of people love the high growth cities, and less, but still many, love the sure bet of Lubbock.

Anywho, welcome to BP and real estate investing!

Probably lower because I guessed on one of the questions and got it right.

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@Avery Gilmer

That's good advice. She owns it outright.

@Avery Gilmer

I tried, and although she has no clue of the value, she was way above my price, and didn't want to negotiate. I didn't push. She just needed a little time. Instead we had a good conversation. I am confident she would go with me over another guy.

@Gordon Cuffe Yes, we had a lengthy conversation in which I found out what was important to her.

@Jonathan Towell Thanks for the connections! I'll give you a call in the next few days when the craziness subsides.

@Griffin F. @Account Closed

Thanks! Yes, I think I've learned that money isn't always the main motivator. However, she WILL lose it to back taxes and ruin her credit soon if she doesn't sell.

On the phone, she just informed me there's another investor she's talking to! the Heat is on.

@Jonathan Towell Since you asked me to keep you up to date on my marketing efforts!

I'm sure you'd find this anyways with your tendency for being on the ball with anything BP & Lubbock related haha.

I got my FIRST call today from my marketing campaign, which I launched earlier this week. (Small victory!)

The seller has a very unique property and situation. I'll share it all with you guys below. Let me know what you would do!

She has a 3/1 house at 1100 square feet sitting on 1 acre of land. All around it, there are new neighborhoods with upper middle class houses. ($120k avg.) This is on the outskirts of Lubbock. Still connected to the city, but this property is like its own country getaway. 

The house is "Zestimated" to be worth 80K. The county appraiser said it is worth 30K! (WHAT?!) 

She owns it free and clear on the mortgage side. But there are $700 of back taxes, which are probably unknown to her. 

I go to the house today, and there are weeds 9 FEET TALL. I can't even go up the driveway! It's not in the best shape. Roof needs repair and much more. Still haven't seen inside. 

She says her possessions are still inside and she wants them moved eventually. She's living in a new city now. 

Oh yeah, and she wants her horses moved too. Did I mention she has another 5 acres across the street with horse stables and a guest house?!?! She didn't either until the end! It has the same type of weeds. Poor ponies. 

So I told you she owns it outright. Here's the kicker- I asked how much she thinks it's worth.... SHE HAS NO CLUE! Honestly, I don't either. SO hard to value, but it's a fantastic location with a lot of potential. It could be worth $80,000 ARV or $200,000 ARV.

Here's what I'm thinking:

•I pay for her moving expenses (horses&house junk)

•I coordinate a place for her horses to stay in her current city and coordinate moving teams for her. 

•I pay for closing. 

•I pay back taxes. 

•She owner finances the note. Payments don't begin for 3-6 months to allow for all the logistics that need to happen. 

•I pay her $0 down because of the other expenses I'll be handling up front. 

•I offer somewhere around $20,000 total for both properties. 

•I use hard $ or an equity partner for repairs.

Exit strategies:

•Clear weeds from 6 acres, then wholesale deal to investor. (2 months)

•Fully rehab properties. Sell to tenant. (5 months) either separately or together

•Fully rehab properties. Sell to investor below market rent. (4 months) either seperately or together

•Fully rehab properties. Rent out (seperately or together) (5 months)

•Wholesale deal immediately. (1 month)

INPUT!