All Forum Posts by: Bob Woelfel

Auction.com has "online" auctions where you can use private and hard money.  It's ran similar to courthouse auctions where most of the time you can't get access to the property as often they have tenants, but those auctions can close 30-45 days out.  The challenge with hard money is most lenders will want to get inside and do an appraisal.  The only caveat to that is if you have a significant track record with the lender and they trust your abilities and numbers.  

@Jim Morris my first thought would be to try and buy it from them.  At the very least get in touch and see what their future plans are.  See if they want to sell and if not ask them to help you with cleaning up the street.  Without knowing numbers I would imagine if they improved their building a little bit I'm sure they could command higher rents so see if you can chat with him about that.  They are probably leaving quite a bit of money on the table because of poor management.  If they aren't inclined to do that I guess you could talk to the city about any code violations, etc.  Good luck.

Hey @Eric Lok....

@Logan Freeman who responded above is a great person to know in the multifamily space in KC.  I would try and sit down with him if you are in town.

@Anthony Wick I often ask myself the same thing.  My first thought would be that you are probably smarter than they are, but everyone has a different financial situation so what do I know.  I'm sure you lose to some first timers who are just trying to get in the game.  I'm sure some are overpaying and not really knowing the realities of the day to day and the costs associated.  Maybe some are buying in cash and therefore looking at it differently than you.  Some are probably house hackers as well, which really changes the numbers and allows people to pay much more than you.  

We haven't purchased on market deals for quite awhile now as well.  It can be frustrating, but there isn't that much that I can do about it so I try not to focus too much on what I can't control.  Good luck.

@Deforrest Ferguson I'm not a huge fan of it for the following reasons. If you take your average deal where you put 20% down you will have to finance 80%. Then the 20% where most people would bring cash you are also financing that. So you'll be 100% financed on the deal and you'll have to pay back a personal loan or HELOC, whichever you are using. Considering it's hard to cash flow deals that are 100% financed that means you'll have very little money left over after paying back both loans each month. So you are buying a property and taking on a fair amount of risk that isn't really going to cash flow. This can be a long couple years of really no return whatsoever.

It's not a bad idea for someone with a bunch of experience who understands the risk, has reserves and is growing their portfolio.  I'm not sure it's the smartest idea for your first purchase.  I would encourage you to save more money and get in a better position financially.  Good luck.

@Drex Tanner I'm going to try and not come off super negative on this, but the reality is that most are bad.  What classifies one as good in your eyes versus one that is bad?

It used to be where the good wholesalers would do a lot of the legwork for you.  They would take pictures, put numbers together, some would even do a scope of work and not go above the 70% rule.  Today its guys or gals just throwing up a non descript ad on Craigslist with no pictures, very little information and no real way of contact them except through the CL email system.  Half the time you don't hear back from these folks for days only for them to tell you they "sold" the property before you emailed but they can add you to their list for the next one.  

I just sat down with a wholesaler last week that does a good volume of deals.  They are moving properties now with purchase and repair around the 75% number.  They require a $5,000 non refundable deposit and no inspections so for someone out of state like you that's going to be fairly challenging model to work with. 

From my experience it's just trial and error and getting on lists.  Some care to learn your criteria and others don't because they just want to build a list and shoot off emails.  I've received email alerts for probably over 1,000 wholesale properties since I started investing and I've purchased fewer than 5 of them.  It's very rare that model works for us.  Good luck.

@Rebecca Wisner I have typically bypassed traditional financing on these types of deals and used our commercial lender on the backend refi.  They don't have seasoning requirements and we've been able to refinance and pull out our money as soon and we finish the rehab and get a signed lease.

@April Bellard if you want to buy a rental then you probably wouldn't want to go to a private lender unless the property needed a lot of work and you wanted to BRRRR. Private/hard money is going to be much more expensive than bank money. Bank money is what most people use to finance buy and holds.

@Jay Hinrichs experience level doesn't change how much or the % of what we will lend, but it does affect the points and interest rate as a newbie has a different risk profile than someone with deal experience....particularly if that experience is borrowing from us.  As you know, the financial position of the borrower can affect this as well.  A newbie with 100k sitting in the bank is going to get a better rate than a newbie with 5-10k and so on.  

We are a direct lender and not a broker so I think that allows us a bit more flexibility when underwriting borrowers/deals and because we only lend in certain markets that we are very familiar with there is a comfort level in going all the way to 70%

In select markets that we lend (Kansas City, Denver, etc) we do offer 100% financing. We loan 100% of purchase and 100% of repairs up to 70% of ARV. Now the reality is those deals in this market have been difficult to find, especially for new investors who don't have the same deal flow as someone who is out searching every day. @Jay Hinrichs is absolutely right on the "education/guru" programs that offer funding.  It seems fairly counterproductive to do this when the funding is out there anyway.  I always encourage newer investors to meet local lenders in their own backyard and go that direction as opposed to online providers you'll never meet.  Good luck.