All Forum Posts by: Carl Schmitt

Thanks guys, I didn't figure they would use them. I just wanted to make sure.
Steve, thanks for clarifying. I never knew the term for these "sales".

This may sound like a dumb question, but I'll ask anyway. When I'm looking at houses that recently have sold on zillow, I see a lot that sold for 1 dollar. Obviously, I wouldn't use zillow to determine ARV. However, when the bank has an appraisal done, how do they handle these properties? I feel like they couldn't possibly use it for a comp, but it seems like they couldn't throw it out either?

I think it depends what the loan would be used for. I'm a salesman for a home improvement company and we offer financing. These loans are unsecured, and as far as I know, they consider it a personal loan, not a home improvement loan. The two top companies we use are Wells Fargo and Enerbank. Wells will do a interest only payment plan starting at 90 days and up to a year. Enerbank does no payments no interest for up to 18 months. (Not meant to be an advertisement for these companies, just experience I have with them). As I mentioned, it depends what you will use it for. If it was for a rehab, it may work. For buy and hold, it would not. Interest rates are in the 14-17% range and they cap these loans at 30k generally.
Again, not an advertisement, just looking to help.

Sounds like the general thought is that the tiny little details don't matter if you never take action. I think it was in the book "good to great", he says, it doesn't matter so much the direction of the bus, what's more important are the people driving the bus. My point of view comes from my current job in the home improvement business. There are small one man shows that are jacks of all trades, and masters of none. Then there are larger companies where everyone has specific jobs(sales, marketing, production). The owner could either try to do all himself, and run out of hours in a day. Or, as my boss says, learn it, do it, teach it, delegate it. As I'm typing this, I'm starting to disagree with my original post. Tough to teach something, or worse, manage, if you don't at least have a decent understanding of it.

Like the title says, I've always heard that you should never be the smartest person in the room. I think a lot of people, myself included, tend to over think things and good opportunities slip past them. So my question would be, do you think it's better to hold off making any purchases until you feel you know a lot about everything? Or does it make sense to learn the basics of the business and then surround yourself with experts in there particular field? To use myself as an example, my strength is sales and working with people. I have done construction work in high school, but its not my specialty and I really don't like it, so does it make sense for me to wait until I know more of the ins and outs of construction? I'd argue my time would be better spent finding and negotiating deals and leaving the construction to the experts...thoughts?

Brandon, to quote Warren Buffet again, "whether I'm buying socks or stocks, I like to buy things when they're on sale". I'd argue that it's tough to buy property on sale when there is tons of other people looking to buy.

Sam, great job and congrats!

Will, that's what I like to hear! At first, it seemed like a no brainer. Then I thought about the fact that the investor would be bringing funds that wouldn't be in first position. It sounds like the way you would structure it would to be partners rather than a passive investor. Seems to me that if you're partners and the person bringing the money also has rehab experience, they won't let the deal go bad.

Sounds like a good thing to me...less people searching = more inventory to choose from

Would you say the deal needs to be better than usual? Or do you think a typical deal with room for 15-20% profit and those terms would still attract private money? How would the investors funds be protected if the deal were to go bad? Obviously that's never the plan, but things do happen, and I'm sure any investor would want their funds secured in one form or another...

I know a lot of people fund their rehabs with either they're own cash, hard money or private money. They purchase the house with it, and pay the rehab costs. However, what if you found a property that needed to be rehabbed, that the current owner was willing to seller finance? What are the chances you could then find an investor/partner with the cash to do the rehab? Would any outside investor loan money in that situation considering the seller has the first position if the project were to fall apart? The goal would be to fix and resell.