All Forum Posts by: Jack McWatters

@Jay Hinrichs hey jay, I really appreciate it honestly that’s really true there’s always a ton of background stuff people kid and people pointing those out is super helpful because you might end up saving a good chunk of money from that!

@Ray Evans thank you for the advice I’ll definetly look into the loans you mentioned and also it’s tough for me to talk about it because people brush me off I’m too young, by hat doesn’t stop me from trying and ima still continue to move forward and try to find deals.

@Jay Hinrichs

Thank you! I actually gave myself almost 100k buffer in the overall build cost just to make sure it covers all the extra cost. For instance on average it costs a bit 200/sq ft to build a 2 1 in brea Ca! So I gave a 100k buffer to cover any unexpected costs. So in theory there’s a chance that the deal would yield more profit.

Here’s my situation!

Found a piece of land that the owners are now going through litigations. Not only that the land has been up for sale for 245 days. Both of these factors plays a role in my thinking hey maybe they would be to sell if I found a lender that can close fast and pay cash. If I can get this property for 150k-200k that puts me in the sweet spot.

Surrounding 2 bed 1 bath houses in this neighborhood are going for 625k-650k which mean if I purchase this plot for 200k build a new similar 2 bed 1 bath house for estimate of 350k on the building costs to be safe, that puts me all In at 550k leaving a margin to sell for 50-100k profits.

My questions is what kind of loans do I look for for development or should I look. For private lenders?

@Zach Gring

Thank you those Both were options that I was thinking. By paying off the principal I would have a good amount to refinance with a conventional mortgage loan, or towards the end I can sell the house as a flip and make a good profit while paying him back.

@Daniel Siapin also I’m curious in learning about what you do in new construction! especially in the California market I’d love to hear your experiences.

@Daniel Siapin Thank you for your honesty HAHA!! I’m working on doing a lot of due diligence and honestly I was actually going to focus on how I can help him before I help myself you know that’s just the steward mindset I’ve grown up with! And you know it’s a screaming good thing if I can pull it off, and honestly a good cash flow for him but I’ll have to see! Hopefully he would be willing to work with me and create a friendship even! I noticed you live in brea and actually I work in brea and live in Fullerton! So we aren’t far away! Let me know if you ever wanna get coffee and talk about your deals and your experience!!

@Steve Vaughan would you typically do a 5-10 year balloon loan or would you try to work out with the seller a longer term with interest? Because for instance what If I went to the seller and said hey I want to buy the house at 700k but I want you to seller finance, here are the benefits for you. We can do a 6 year balloon where at the end of the 6 years I pay off the rest of the loan fully, and I pay these payments principle only, which would then benefit you because you will not have to pay taxes on that monthly income. Now if he wants interest then you can say hey I’m open to the interest portion would you be willing to lengthen the loan and finance it for 30 years on a 3.5% fixed interest? Then you can figure out what monthly payments are needed and figure it out from there. Because at that point you transfer the title and then after a few years you have enough equity built up that you can then go and refinance it with a bank.

@Steve Vaughan hey Steve would you mind going into further detail on your method I’d love to learn from you!

@Steve Vaughan hey Steve! I’m in California! I was hoping by utilizing the seller finance I can live on the property and make a small cash flow while living for free and near my work. I was hoping in pursuing the type of seller finance where my name gets put on the title that way it gives me multiple exit strategies in the ling run, whether it’s high appreciation or I wanted to cash out and pay off my loan. Is that a possibility to do in your experience?