All Forum Posts by: Edwin Epperson

@Clinton Bolton I agree with @Drew Sygit, having an entity and legal structure here in the US should be a definite requirement even for you as far as asset protection and liability goes. As well there are lending programs (like you mentioned) for foreign investors, both short term (<12 mo) and long term (30 yr). However, I would ask "When you say house hacking" what exactly do you mean? That term is used for someone who will be living in the property while fixing it up, to then sell or refi and roll the profit into their next property. If you speaking of purchasing rentals, there are plenty of lenders who offer foreign investor loans to acquire rentals. You should approach all offers with the understanding you will most likely have to put 25% or more as a down payment for any purchase. As well most capital investors who offer 30yr fixed rate loans want to do so inside an MSA. I broker for one of these type of investors. I'm not sure which counties you would like to invest in but there are quite a few in FL that meet the MSA requirement from my investor. Now the big hurdle right now, and for the foreseeable future is the struggle with "finding a deal'. This is where many foreign investors will struggle to find the really good deals because they just get snatched up if they are listed on the MLS, and most likely they are not being listed on the MLS they are being assigned via wholesalers. So that would be my encouragement meant to you is to network with wholesalers, who get properties under contract in locations you would like to own property, and get on their mailing list. You will want to make sure your entity, ITIN, and bank accounts for the entity are set up and funded. Then it's becoming a master of quickly sifting and filtering through all the garbage to find the gems. If all that is too much work (which will be a bit of time on your part) the easier route is to vet and identify RE Investors in the areas you would like to invest and structure JV's with them. This would allow participating in cash-flow/ profit while leveraging their existing marketing and business structure.

I literally just made a loan to a Norwegian who had some property here in FL.  I collateralized both assets for 6 months so that his 1031 exchange would not fall through.  I lend mine and my investment partners capital in short-term loans, but we see a lot of strategies and styles of deal structures.  Happy to help and answer questions if you want.

@Eric Wiinanen Best Cheer Sone is the name of the company.  If you order 6 slabs or more they will deliver for free.

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@Patrick K. I agree with @Kevin Sobilo with some additional thoughts from my experience thrown in for good measure.  Personally, I have never heard of a "loan partner".  I am a PL out of Tampa, and I lend in FL, but I never consider myself a "Loan partner".  A lender, yes, but the term partner has legal ramifications and expectations, especially in the eyes of the court.  Based on your statement, Mr. Greene is using "loan partner" and "equity partner" congruently, I would actually assume he is meaning the same thing' he finds private money, who wants to provide him the "soft costs" of getting a loan, and exchange he provides them some form of compensation.  Equity partners typically mean that they will receive a percentage or a specific amount of the realized equity, i.e. the profit.  This could be in capital gains on the ongoing profit from the performance of a property such as rental income.  As I do not know your personal level of RE investing experience, a word of caution.  If you DO NOT have experience (I consider anything less than 5 completed deals inexperienced) and you are trying to line up a "loan partner" or "equity partner" I would HIGHLY recommend that you seek after an experienced RE investor who will be willing to provide you the soft costs, as well allow you to leverage their team, experience, wisdom, and contacts to help the project be successful.  Happy to have a conversation if you would like.  Best wishes and much success.

Kaitlyn, 

Good morning and I trust your week is starting off awesome. I read your post and I see this struggle all the time with new investors or even experienced investors who have their capital tied up in many different properties. I lend my own and partner investors' capital out to real estate investors in the state of FL, but I run a business, so... sort of a hybrid between private and hard money. As a private lender, my primary concern is how do I mitigate risks? The biggest risk; is taking a property back from a real estate investor. How do I mitigate this? By making sure the real estate investor has "skin-in-the-game", a euphemism that basically means the RE investor has something to lose if they default, or decide not to pay me. The more someone has to lose the less likely they will default, and they will do everything in their power to stay current and pay me off as soon as possible, whether selling the asset or refinancing. The next big risk I see is getting my capital back. Known as the "Exit Strategy". If a RE investor plans on holding the property (like you had mentioned) then BEFORE I will provide my loan, I need to know that the investor can get refinanced into a 30yr loan. So I will want to know what their credit score is, what their financials look like and what their property management plan looks like. Without a firm solid exit plan for a buy and hold I'll simply let them know I would only be willing to offer the loan if they sell the property. This also plays into if someone is going to BRRRR a property, actually the BRRRR will not work if they cannot qualify for traditional financing.

To address your question about getting a loan to cover the closing and holding costs (what I call soft costs) and cost of construction (what I consider part of hard costs) you simply will not find a HML or PL that loans on these. Why? Because their loan would be in 2nd position (much higher risk of being wiped out in the case of foreclosure) as well whoever is providing the 1st position loan (typically used for the purchase of the property) may not even agree to give you the purchase loan because the RE Investor does not have skin-in-the-game. So how does an RE Investor work around this? JV's or partnerships! This provides many more benefits than simply accessing capital. If you JV or partner with a capital provider you would definitely want to partner with another RE Investor who can look at the number with you, has experience in the strategy your using, and has plenty of contacts. They basically should become a mentor to you, not just a capital source. I have seen plenty of times, where newer RE Investor line up "JV" money from family and friends. If they are new and inexperienced this capital provider is not only taking on the most risky position of the capital stack, but they also are setting the whole project up for failure due to their lack of being able to provide those additional safety measures.

In closing, I would encourage you to err on the side of patience and reach out to local, successful RE Investors, to ask if they would JV with you. If anything waiting until your next local meetup happens and asking experienced RE Investors at that meetup would be a great option as well. I'm always open to having a conversation and helping you strategize the process but everything I mentioned above is what I would tell you on a call. Best wishes, have patience, and always, always conduct your due diligence.

Investment Info:

Single-family residence private money loan investment.

Purchase price: $197,000
Sale price: $307,500

I provided a private short-term interest-only loan for a local Fix & Flipper. The partners had a falling out and my borrower had requested enough capital to purchase out their partner. They did not request any cash out of their investment. We closed in 7 business days, and they only had the loan for just under two months. When they sold they were able to keep 100% of the profit without having to split it with their original investor.

What made you interested in investing in this type of deal?

I appreciated that the construction was already completed and that the borrower was willing to leave their capital in the deal. They simply needed their business partners' capital returned to them, along with the HM loan from a previous lender.

How did you find this deal and how did you negotiate it?

I had met the borrower via one of the Facebook groups I am a part of.

How did you finance this deal?

I utilized mine and a few investment partners' capital to make the loan. I held the note, and serviced the loan for the < 2 months the borrower paid.

How did you add value to the deal?

I facilitated a quick close due to the familiarity of the location and the property.

What was the outcome?

The borrower sold the property and we were paid back in less than 2 full months.

Lessons learned? Challenges?

A quick closing is sometimes the difference between a real estate investor's deal going well or not so well. I am focused on solving problems.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

The borrower took care of this loan. We did use a local title company called AMZ Title, they are local to Tampa, FL, and I highly recommend them if your looking for a real estate investor title company!

Investment Info:

Single-family residence private money loan investment.

Purchase price: $197,000
Sale price: $307,500

I provided a private short-term interest-only loan for a local Fix & Flipper. The partners had a falling out and my borrower had requested enough capital to purchase out their partner. They did not request any cash out of their investment. We closed in 7 business days, and they only had the loan for just under two months. When they sold they were able to keep 100% of the profit without having to split it with their original investor. You can find Blue Bay Capital LLC as the lender by conducting a quick county recorders website research.

What made you interested in investing in this type of deal?

I appreciated that the construction was already completed and that the borrower was willing to leave their capital in the deal. They simply needed their business partners' capital returned to them, along with the HM loan from a previous lender.

How did you find this deal and how did you negotiate it?

I had met the borrower via one of the Facebook groups I am a part of.

How did you finance this deal?

I utilized mine and a few investment partners' capital to make the loan. I held the note, and serviced the loan for the < 2 months the borrower paid.

How did you add value to the deal?

I facilitated a quick close due to the familiarity of the location and the property.

What was the outcome?

The borrower sold the property and we were paid back in less than 2 full months.

Lessons learned? Challenges?

A quick closing is sometimes the difference between a real estate investor's deal going well or not so well. I am focused on solving problems.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

The borrower took care of this loan. We did use a local title company called AMZ Title, they are local to Tampa, FL, and I highly recommend them if your looking for a real estate investor title company!

Francis, so sorry I missed this!  I'm right down the street near Fords, across from the outlet malls.  Would appreciate attending next months meeting.  Count me in.  Do you all have a meetup or eventbrite event registered?

Best place to look is eventbrite, meetup or join a few FB groups in the area.  There are always a few around.

Kyle I agree with Valentia. I live in Tampa FL, and many of my RE Investors were hoping to refinance out of my fix and flip loan into a 30yr fixed rate loan to use the property as an STR. St. Pete specifically has very strict rules surrounding STR's, and specifically what neighborhoods they can be in. There was a case where someone was doing Airbnb arbitrage and ended up getting fined over $30K by the city of St. Pete because they were not following the laws as it pertains to STRs. There are plenty of places to do this, just know your local laws.

I know of a renovator there in the FWB area.  He does a lot of work and may be able to provide you a recommend.  Let me know if you would like the connection