All Forum Posts by: Dell Schlabach

Hello Elizabeth and welcome to the greatest real estate forum on planet earth.

Couple networking groups in Akron CAnton area, links to their sites for you to peruse.....

Stark County Real Investors Association, regular meetings 

http://www.meetup.com/Stark-County-Real-Estate-Inv...

@Jason Rose   @Trent Patterson and Firelands Title are doing some impressive meetup and investor networking meetings, 

http://www.meetup.com/SmartStartRealEstate/members...

Akron Canton Group with regular meetings

http://acreia.org/

Re: Funding the deal, obviously depends on a variety of factors, mostly dependent upon your comfort level with certain risk factors. 

Cheapest way to go would be an equity line against your home.  Similar  funding option with less tied directly to your home,, fund the purchase (maybe 80%) with a local lender,  and a l.o.c against your home for the 20% + the amount needed for rehab.

Depending on income and credit there's a local portfolio lender who will fund the rehab as well at  interest rates at about 5%. with plus aprox 1,500 in total fees. 

Partnering with friends and contractors can become very interesting, you get to know sides of people you had no idea about, if things don't go as planned.  Important part is delineating the various aspects of the project and who has what. Thinking it through in the beginning, and writing it up goes a long way in preventing conflict later on. Knowing who has the final decisions on scope of work and design, timeline expectations, who is responsible for what, how will you sell the house at the end, fsbo, or realtor,. If fsbo, how long will you try to sell before listing, who makes the decisions about when to drop the price, what happens if you lose money.

Fun stuff to think about, but if you spend an hour or two hammering those details out with a partner it helps clarify things, and when they come up you already know how to handle them. 

Other funding options are local hard money lenders, couple hang around the local reia meetings, but expect 18-25% annual interest rates when you include all fees. 

The best to you in your new venture ...

My understanding is that your IRA cant invest in your personal renovation projects. You can use it to invest, loan money to others. I have a couple lenders that fund deals for us with IRA funds. I am sure someone else will explain this in more detail for you. You can also do a search in the upper right hand corner, enter IRA, I am sure you will find a lot of information.

401k, have you checked into borrowing against the 401k, may be an option for you. I have a partner on project we are putting together that is borrowing 10k against her IRA. Something worth checking into.

BTW, Welcome to bigger pockets, and congratulations on doing your first flip!

 technical difficulties will try to respond later

you will

When we first started in the business we were paying people $500 if they found us a house that we purchased. I had an acquaintance call say had a deal that he found the night before he would like me to look at. As we are driving to the house to look at it I asked him how he found it,  he hesitated then said a woman he was talking to the night before told him about it. Pressed him a little more about the woman and he said he got a monica the night before...and she told him about it.  I said a monica, whats a monica this was in the clinton era, as i asked the question,  the answer dawned on me, and I asked you paid for one?

A sheepish , yes.

 I said Ive heard of a lot of different creative strategies to find deals, but I've never seen that one being taught anywhere. 

Hello and welcome to BP, fellow Ohioan. 

Theres an active BPer :-) in your back yard, @ben leboyvich, from Lima,  you may want to connect with. 

Young single mom, maybe she has an exclusive with the realtor and cant get out, but just as likely she has never bought a house before, this realtor may have showed her numerous properties, and the buyer wants someone with experience to help her through the sometimes complex and scary process of buying a first home. 

If I was making a good profit, I would pay the 3%.  Also nothing wrong with 2.5 or maybe 2%, depending on the price of the home. I wouldnt make it so low, that by the time the agent splits the comission with her broker that she isnt making enough money to be worth her time.

I personally would rather pay an agent to handle a first time home buyers multitude of questions and concerns, as well, as schedule apprasials inspections, financing issues etc

I have paid the 3% numerous times to agents that brought buyers before a house was listed.  Also 3% is better than paying 6% to two agents.

We currently use five different private lenders, lowest one is paid 6%, highest is 10% +1500 loan fee. 

I consider 10%-12% very reasonable for rehab money. 

I agree, the OP provided limited information to provide good advise. 

I know my agent would refer me to someone else if we consistently made low ball offers on new or relatively recent listings that have almost no chance of getting accepted. 

We did submit an offer on Monday through our agent, house listed at 83.000, had recently dropped from 89,000. Its been on the market for long time 130-140k ARV, in an estate, we offered 50.000. They countered at 70,000. The listing agent suggested to my realtor that we counter something so the seller wont feel so bad. We didn't, mostly because I had not had time to look at the property myself, and yesterday they accepted our 50.000 offer.

@Alexander Merritt  I have one private lender with the same setup as @Zoran M.  mentioned.  My lenders all give me purchase and rehab money up front, but that is after significant experience and trust being build over a period of time. 

HMLs typically have their standard structure and protocol. With  private lenders you tend to have more flexibility to vary the terms of the deal. 

Most typical HMLs will be structured similar to what @Jon Holdman described, each with their own variation on the basics. 

You can also Google rehab lenders, many will have their criteria on line.