All Forum Posts by: Account Closed

Tom, 

We'd need to know more specifics about your situation obviously.  If you invest with your 401k you don't get the profits and can't live off them- the profits would have to go back to your 401k.  So that doesn't help you eat this week.   Now you can roll that retirement account into a solo401k and you can borrow 50% of your 401k balance up to 50k (in your case 32,500).  You could use this money to invest in real estste and flip houses and then keep the profits.  You would, however, have a payment to make back to your 401k each month since you're borrowing the money.  I'm assuming you're hoping to make money to live off of since you don't have a job, but I could be wrong..  Again, more info would help.  

Just to be clear I was really commenting on the lender or broker not being able to explain all their abbreviations.  To me that's a red flag that it was just some broker possibly and the loan may or may not have the ability to really come through.  I do think that money is more expensive than bank financing, but a few years ago I was not in a place to do bank financing and did several hard money loans where the numbers worked for rentals.  I purchased a quad, a few duplexes, a 14 unit building, and a 10 unit building all with hard money and then later refinanced into bank loans or sold them as performing assets to other investors.  I think if the numbers work then go for it-- I was commenting on the  actual conversation you were having with this lender.  In my experience, only the loan brokers talk in abbreviations like that or if a lender does as well, they are more willing to explain it all.  Just my opinion but I hope it works out for you.  

Have you considered finding new buyers? Look up recent cash purchases in that area, network with that REIA, those realtors, etc. I don't like to invest 15 minutes away from my office..

@Jason Haney  Please send me the info on the Charlotte properties.  I actually put a property in my rental portfolio from a similar deal with a note investor from Bigger Pockets a few years ago.  Happy to see if we can make it work..thanks :)

@Troy Knight , nice job taking the initiative!  I'm in, and looking forward to it :)   Thanks for setting this up

The 6 months pp could mean 6 month pre payment penalty.. But Robert could be right as well.. I'd ask the lender for clarity. Really, to me this offer seems bogus and they should do a better job of explaining their offer. Makes me a little suspicious..

Where could we find your blog Loren?

Just for comparison, I talked to a used car dealer about this and he pays investors 12% on their money (1 point a month), secured by car title. In the end, I decided I preferred real estate, as it's easier to find in case of default :)

C Coley Mitchell, thank you. It's been a fun, busy year so far. Do you go to REIA meetings? We have a subgroup meeting tonight towards Lake Norman.

I think it really depends on your track record, financial position, and ability to raise other funds. A few years ago when I was starting out I would've given half the profits away for someone to put up the downpayment on a loan, even if I had to sign for the loan and carry a payment still. But that was when I had few options. If your investor wants to share in the risk/reward of the deal with profit participation, most agree it's fair if he gets 50% of profits if he funds the entire deal. If he's only funding a portion (such as downpayment and/or rehab funds), and you still have to guarantee a loan, I think it's fair to give him 50% of the profits per his contribution. So, if he contributes 30% of your entire investment of purchase and rehab, I'd think giving him 15% of the profits is fair to everyone. Or, you could partner with him, and both sign for the loan. That would change my opinion as well :)