All Forum Posts by: Evan Ventura

@Justin Fraser Awesome advice, thank you! You're definitely right, I need to put something together and create a dialogue with the lender, even if it is hypothetical. Chances are they are going to have as many questions as I do (they have never been involved in REI), and the sooner we address everything the better. I am sure there is so much more that will come up once we actually take the leap and get into a deal also. I have been rather general so far so there is not much to work with.

I'll be sure to reach out when I finally get into it and have questions that arise, thanks!

@Don Konipol Thank you for your feedback and playing devils advocate. Despite my "ego" which may at times cloud my "thinking rationally" it is appreciated. I have a few questions for you:

What questions should I be asking? Should I ask any questions at all? Should I kick rocks? While my questions may seem a bit elementary to someone with such breadth of experience, I believe them to be realistic and somewhat more specific than, "hey everyone how do I get rich and have a show on HGTV?" The fact that all of my few posts solely ask questions should be my admittance that I am indeed not an expert, and far, far from it.

Points 1 - 5 are entirely true statements. I have nothing. I am starting from 0. Forgive me, but perhaps after 15 years and 500 deals you have forgotten what led up to deal 1? Surely, education is huge (what I am trying to capture on this forum and beyond) but do you believe there is a point at which you just need to dive in and do it? If my first dozen deals broke even, or even lost a little money (full time job could mitigate this), I would be thrilled because I would have learned a wealth of knowledge from those experiences. If they were a total bust, well, thats the risk we take. Surely if it were as easy and romantic as the shows make it out to be everyone would be a rich beautiful real estate investor! Applying the same mentality, I have been fairly successful in my industry, and would like to see if I can accomplish the same in real estate. I am genuinely interested in learning what brought you to where you are today, surely you can relate in some capacity.

Lastly, I must ask, what "program" of mine were you analyzing? I do not believe I shared any specific strategies, just a basic "I am going to do deals with private money." I think this general concept is fairly accepted, though surely I could share deal-specific strategies with you for feedback if you had the time of day for such a peon. If what I understand is true, you are saying as an experienced investor cross-checking (an imaginary deal I proposed somewhere on the forum?) you find me unfit to invest in. Don't worry, I wasn't going to ask you to finance any of my deals anyway. Inherently, those who are taking the leap of faith to invest in me accept this risk but justify it against my character.

I hope I did not come off brash either, and appreciate any advice you could offer further.

Thanks Simcha Davidman it's the Philadelphia skyline. Funny story, we originally planned on conducting all of our business in Philadelphia, then realized this was totally impractical. You reminded me I have to change that picture to the Jersey Shore! Best of luck to you grabbing that first deal! Let me know when you finally find it.

@MJ S. Your advice is greatly appreciated. You are correct in assuming neither lenders have ever participated in a cash real estate loan. I will take your advise and feel out what they believe is worthwhile interest rate wise, and pay dividends later where profits allow in gratitude.

My partner and I are big on transparency and will absolutely implement contracts. Could you recommend any key points to be included in a contract? Friends or strangers, I would like protect everyones best interests and leave as little grey area as possible.

Was wondering if anyone can offer advice on structuring private money loans. I am new in REI and am currently seeking out my first deal. When that first deal finally does present itself, I want to be ready and move on it with confidence.

I currently have two eager private money lenders on board, one a relative of my business partners, the other a contact I had made at a previous job. While these lenders are motivated to get deals underway, we have only spoke in generalities; no hard numbers. I would like to structure deals in a manner that is sustainable and highly beneficial to all parties, and would like these relationships to be long term and attract other lenders from their circles. 

With that being said, I have read of investors paying anywhere from 6-12% interest, points or no points (though more so with hard money than private). I will be conducting all of my business in New Jersey with the goal of flipping homes to supplement paying down a large rental portfolio. I plan on finding these properties predominantly through wholesalers and auctions, and perhaps the MLS if one ever slips through. Here are my questions:

1. What do you believe is a fair interest rate? 

2. Points or no points? If so, how many?

3. Is it wise to wrap as much or as little into the loan as possible (down payment, principal, rehab, misc)?

4. What is a fair flip time frame?

5. What is a fair buy and hold time frame?

6. If seasoning a rental until refinance, do you begin paying down the lenders interest using cashflow or do you wait and pay the full balance upon refi?

Additionally, if there is any other information I have not asked you feel is important for me to consider, please advise!

I am new to REI and am attempting to explore all avenues to make my first deal. Realizing the scarcity (or at least my perceived scarcity) of ideal rental properties in the Jersey Shore/Central Jersey area, I thought, if I can not buy it - why not build it?

After rebuilding my own home after Hurricane Sandy using a modular company, I realized how (with luck and due diligence) cost affective, convenient, and custom these homes can be. 

My ideal criteria includes: 1,200 - 1,500 sqft, 3 bed, 2 bath, garage (contingent on elevation), and bullet proof.

I have seen some listings for somewhat odd and overgrown parcels of land selling low where the numbers might work quite well. Some of these properties are unusually shaped, heavily over grown, but not necessarily in horrible locations (on a busy road, in a dangerous neighborhood). Cleared out, would these characteristics necessarily ward off potential renters? Overall, does anyone have any experience with this type of undertaking? Cost of clearing a lot, etc?

I understand much of the red tape associated with new construction first hand from building my own home, but blame much of it on a very incompetent builder.

Thanks!

@Vishal Patel Thank you for the reference!

Dan,

Greet to meet you! I am 22 and also just breaking into REI with similar intentions. I live in Ocean County and am tirelessly searching for that first deal, along with my business partner. While I have not closed my first deal yet, I am quickly learning how difficult it is to make the numbers work in this area and am seeking the advice of those who make them work. Best of luck!

@Simcha Davidman Our situations are identical. I, along with a business partner, are beginning to take serious steps towards finding our first deal through all the same conduits only to be disappointed (we are not surprised by this). We have had several offers scoffed at without hardly being considered - I believe the realtors we have been working with are more familiar with working with end home buyers and are more interested in this premium. 

We also attempted wholesaling "in-house" only to find this to be impractical with our demanding, full-time jobs.

Our primary interest is SFR rentals in the Jersey Shore/Central Jersey area with flips to pay these down faster. Also considering developing empty lots to achieve this where the numbers work.

We have access to large sums of cash via two motivated private lenders and are exploring auctions as a means to find the deals.

Curious if anyone around the Jersey Shore/Central Jersey area is, or has worked successfully with, any wholesalers. I am brand new to REI, as is my business partner, and after months of "analyses paralysis" we are on the hunt for our first deal. Quickly; however, we are realizing these deals are not going to jump out and smack us. We have made numerous offers following conservative guidelines (BP calculators, 1%, 70% rules, etc) and have not had our offers taken seriously. We are aware of the obvious pitfalls of the MLS, but it was a place to start. Obviously, New Jersey is a competitive, expensive market where the good deals are gone before you know it if you don't know where to look. Can anyone offer any experience? Additionally, I will be attending the Ocean County Sheriff Sale this coming Tuesday to observe (we have two private lenders who are interested in working with us).

Thank you in advanced for any assistance you all can provide!