All Forum Posts by: Benjamin A Ersing

@Mike Bhak, its a real possibility to have international rental properties. There's a small contingency of people here on  BP that are doing it. Its a fairly different ballgame though, than investing in rentals in the U.S. 

What's your primary goal: Just exploring the concept? Looking to buy for personal vacation home first, and any additional rental income a bonus? Property portfolio diversification strategy? Other?

@Jatinder Athwal lots of responses here about hard / private money, it’s a good route just be aware that most are short term lenders looking for quick fix and flip / refi deals, not long term buy and hold. So if you want to go that route, you’ll need to find a property that needs significant rehab, and make sure that when fixed up it will comp as high as you need it to to pay off your private lenders. They often charge high single digit to mid teens interest rate, and expect a return of capital in 6-12 months. So you’ll want to consider whether you can turn a house and refi it that quickly; and whether the refi value will definitely be high enough. If you get a bad appraisal upon refi, you may be stuck needing to pay the private lender out of pocket, or risk losing the house to them.

It’s definitely possible, not trying to deter you, just providing tidbits I wish I knew when I first started.

@Jatinder Athwal its a good idea, just remember that it costs a few thousand dollars to refi. You may be able to roll the cost in to the new loan, but you may not. Depends on the home value.

@Jatinder Athwal you could borrow against the life insurance for something else that you would have paid for out of pocket, and reallocate those funds you’ve now saved towards the down payment.

@Ryan Aurand very interesting concept!

You may already have run these numbers, but question one for me (if I were the seller) would be: how much $ are you asking me to give up now through the discount, and how much am I going to get back, total, by the end of the profit share? I’d run a Discount Cash Flow analysis on it.

You may be able to find unsophisticated owners who will agree to it w/o running that analysis, but more sophisticated investors will also then look at the opportunity cost of capital and ask themselves if they sold at market rate and invested the difference between the discounted price you’re offering and the fair market value, could they make more money on their own investing the difference, than you’re offering them.

So to summarize: 1. Profit share total value will have to equal more than the discounted amount, and 2. likely sufficiently more to account for the money seller could otherwise make with the money they’re giving up during that five year period.

Or find someone who’s desperate to sell and you’re the only game in town.

Food for thought. Good luck!

@Alancha Thompson, there are some more stringent requirements but its definitely possible. Do you have a specific preference for types of properties / geographic area, etc...?

Feel free to DM me if you want to discuss more.