All Forum Posts by: Brad Ericson

@Andrew & @Patrick
Thank you for those well crafted responses, I appreciate your time. I understand there may be some extra risk that comes along with this type of deal or fees as you have indicated. My thoughts were that the extra fees would be acceptable as long as the results are successful. I am always confused when deals fail just because of a couple of percentage points. And, I also agree that a "partner" or an "insider relationship" would be best in this situation. I am looking at all options or scenarios to utilize, so I appreciate the feedback. 

 Thank you, I wasn't aware of that legal aspect. I appreciate that information.

Thank you for those perspectives. Feedback and criticism fuels decisions. 

Thank you for the feedback, appreciate that position as an investor. Would it make a difference if the there were 2 contracts signed and executed with title company at the same time? This might relieve or at very least lower the risk, because then the value would be same on paper, just 12 months later. Investor would have one as the buyer and one as the seller, both executed to become enforceable.

I own the property currently and would like to realize 100% of my equity.

I posted this same scenario in a different forum category, but I think this section makes more sense as this is not a traditional deal. 

I would like to enter into a purchase, leaseback and repurchase agreement with someone. This would be a short term deal (12 months) with a 16% ROI and full return on investment capital for the investor at the end of the deal.

Investor purchases my property at $350k (comps will be provided). The investor leverages their cash position at a financial institution of their choice and puts 20% down and pays the appropriate closing fees (total of ~$75k).

I would sign a tenant lease agreement with the investor for 1 year valued at whatever the monthly loan amount from the loan above, my rough estimation would be ~$2,000.

ROI details: I would pay the investor $1,000 monthly interest payment on top of the loan payment to the bank. Totaling $12,000 in monthly payments directly back to the investor.

Then at the end of the 12 month period, I would purchase back the property at the same valuation ($350k) and the investor would get the initial $75k back in a lump sum after the transaction closes.

So, the investor would receive a total of 16% ROI on initial investment over a 12 month period, plus receive the entire $75k initial investment back. 16% ROI = $12k/$75k

I feel this is a lower risk deal and a clear & quick exit strategy for someone that just wants to make some cash flow without tying up their capital for a long term period.

Is this too "creative" for an investor? Thanks so much for your time in reading and/or replying.

Thanks for that feedback, appreciate your time. I would reply that the buyback would be backed by an executed contract for the purchase at the end of 12 months, including penalty clauses if not fulfilled. 

I am always looking to increase my lender network. 

Hello all, new to this site and looking to learn. I am not new to real estate as I have had my RE license in TX previously but have since let it lapse as I am more interested in investing and life happens.

I am in a unique position and want to leverage my equity to do more deals. I own my home with $200k equity (valued at $350k). I am looking for a private investor/lendor to partner with to realize my equity and leverage the money to kick start my real estate investment portfolio. I am not sure exactly how to go about this or if this is even possible, I do know that there are creative deals happening every day throughout the country so finding the right partner is ideal. 

I am just going to describe my perfect situation and I would love any and all feedback, concerns or criticism. 

I would like to enter into a leaseback and repurchase agreement with someone. This would be a short term deal (12 months) with a 16% ROI and full return on investment capital at the end of the deal.

Investor purchases my property at $350k (comps will be provided). The investor gets a loan at a financial institution of their choice and puts 20% down and pays the appropriate closing fees (total of ~$75k). 

I would sign a tenant lease agreement with the investor for 1 year valued at whatever the monthly loan amount from the loan above, my rough estimation would be ~$2,000. 

ROI details: I would pay the investor $1,000 monthly interest payment on top of the loan payment to the bank. Totaling $12,000 in monthly payments directly back to the investor.

Then at the end of the 12 month period, I would purchase back the property at the same valuation ($350k) and the investor would get the initial $75k back in a lump sum after the transaction closes. 

So, the investor would receive a total of 16% ROI on initial investment over a 12 month period, plus receive the entire $75k initial investment back. 16% ROI = $12k/$75k

All of this would of course be documented through contracts with protection clauses for both parties.

Questions for review:

1. Are these types of deals available?

2. Is this a good deal for a RE investor, does 16% move the needle?

3. Is this a good deal for me, am I paying too much?

Thank you so much for any help or advice!