All Forum Posts by: James Blair

Schwab Pledge Asset Line is competitive. Rates are set based on the amount of non-retirement assets you have with Schwab. Allows you to keep your current portfolio with the ability to access $ to fund projects. 

Important to note that the amount available is determined based on the actual stocks/bonds/etfs/mutual funds in your portfolio. Safer assets like a T-Bill allow you to borrow 96% of the value where blue chip stocks like Apple are at 70%. Riskier assets are lower percentages.

As an alternative, you can also look for a private lender. Lots of posts explaining the difference between hard money lenders and private lenders. Generally, private lenders offer more flexibility and lower fees than hard money lenders.

Have you had a conversation with your tenant? Is he going through a financial difficulty and that is why he is late with the payment? Good news is that he historically has paid on time and when late, paid the prior months + the penalty. I would definitely make sure I understood his situation before starting the eviction process.

thanks for all the responses.. very helpful

For the past five years, I have been providing private loans to a builder for new construction projects. Our agreement has typically been structured as an interest only loan, where he puts down 25%+ when purchased and I provide the loan for the balance plus draw payments for construction. The builder makes monthly interest payments and repays the principal once the property is sold. This arrangement has worked well for both of us.

However, we now have several projects that will be running concurrently, and the builder is facing cash flow challenges with making the monthly interest payments. To address this, I have agreed to defer the interest payments on our next project until the property is sold. At that time, the builder will pay the accumulated interest along with the principal.

We have discussed a few different options to structure this arrangement, assuming an interest rate for interest-only loans with monthly payments is 10%:

Option 1: delayed interest with a rate of 12% (interest rate is 2% higher)

Option 2: charge a lower interest of 8% then profit share (need to determine appropriate % split)

Any other thoughts on how to structure this arrangement?

Real estate is funny thing. Have been investing and loaning private money for 20 years and have interacted with all walks of life. People feel like real estate always makes money as long as you have the money to invest. I think this has been compounded by social media and all the real estate gurus out there. Have met people who spend more time doing research on a new TV than a 6 figure investment in real estate.

Totally reasonable to ask for his best terms. You want to offer something that works for him but more importantly works for you. Since this is the first deal that you are doing with him, I would not offer 100% financing unless you are fully confident that sale price will exceed ARV. As someone else, had mentioned, the numbers on this are very tight.

Hi Brick,

As an alternative, you may want to consider converting the 4 units to 4 condos and selling each individually. Would take some work and $ but may be worth it. Best to partner with a builder who has experience in JC and can navigate the permit/zoning process with the town plus do the renovation work needed.

Hi Mark,

Welcome to BP! Jersey City Heights is one of my primary areas where I invest. Will send you a DM with my contact info.

Mortgage company may require the appraisal but what may happen is that you would have to fund 20% of appraised value plus the difference between the appraised value and sale price. Here is an example assuming $500K sales price, $100K down, $400K loan and appraised value of $450K.

Down payment = Appraised Value * 20% ($450K * 20%) + Difference between Sale Price and Appraisal ($500K - $450K) or $140K

In this example, loan amount is reduced to $360K and down payment increases from $100K to $140K. Other option is to reduce the % down which will lower the numbers above.