All Forum Posts by: Jay Hinrichs

family loans are usually anywhere from 5% to 12%  no hard and fast rule.. 

just make sure you know what your doing nothing worse than having a bad deal with family money :)

@Chris S. 

  I have a little different perspective... of course its a west coast perspective were primary homes over the years have treated me very well.  So I think this is somewhat of a regional question like Jon alludes to.

However I always look at personal residence separate from business and I buy purely on emotion. Quality of life.. in my younger days schools ( IE spent half my income to live in the Palo Alto School system).. ease of commuting to work.. shopping.  When you take those into consideration it will also dictate what you spend on a home..

Once you have your home life covered and everyone is happy and comfortable it helps you succeed in your other endeavors  RE investing or what ever.

@Divina Maruca 

  Agree on professional closings, however this is not going to preclude an equity skimming incident.  Subject too transactions in the hands of those with less than better intentions and or lack capital and experience and are following some guru techniques is a really dangerous transaction all the way around but especially for the seller as you note.. The poor sellers in these transactions lose control of their properties and end up in all sorts of financial turmoil.  Good for OHIO  and Great for FLA making it a Felony... If the US just followed Floridas lead that would put an end to newbie wannabees and out right crooks partaking in this activity.

@Account Closed 

  broker probably has experience with agents writing and or assigns deals only to have them fall out B/C the person offering could only perform if and when they found someone to assign the contract to or double close.

As Ned says they must present what you dictate its up to the SEllers broker and the Seller to counter or strike those clauses.  Also on some fannie and other institutional OREO the government won't allow that language ... and if you say your paying cash you have to pay cash no loan etc etc.  we run into this every day with my guys that I fund throughout the country.

@Ryan Dossey 

  good luck you have lots of years ahead of you to create a good foundation and team

@Dionte Graves 

nothing petty about your vacant rental getting hit by thieves and vandals  :(   I know what your saying though.... think I will recommend those around to others I know that are rehabbing and see how they work for them.

the vandals and thieves they get caught on to these things usually after not to long but in the short run I could see this being very benefical if it works of course

@Mark Ferguson 

@Justin B. 

As your lenders what their max credit is to anyone borrower, if your dealing with a smaller community bank they will have a loan limit per borrower.. Or they call if familial debt.. IE you have many different LLC which each have different projects in them.. This is how we work it in the building trades.. So each subdivision or grouping of lots will be in a different LLC .. So the banks will have a total dollar number they will allow to anyone borrower.. At least that's how it works in our market and of course depends on the size of the bank my community bank is about 350 mil. and there max loan is 6 mil to any one borrower or company. Depending on were your at in the country this could be ample credit or it could be just 6 houses in San Francisco area :)

@Ryan Dossey 

  From my experience over the years.. I would start at a good local community bank and with a specific banker and then stay with that banker for life if you can.. I have 4 constants in my business...  1. banker  ( same banker for 23 years) 2. Insurance agent ( same agent for 20 plus years) Accountant ( same accountant 20 plus years) Attorney (same attorney for 20 plus years)..   Plus my accountant and banker are good friends and do a lot of business with each other... So when I do my compiled statements each year ( loan covenants) they fly right through. 

As you walk before you run and have success your banker will then keep increasing your capacity.  and then like what happened to many in 08 and 09.. those that banked with the big banks got the cold shoulder many small community banks ( if they did not go under) stuck by the core borrowers... This happened to me for sure.

then on the rebound my community bank gave me first look at all OREO and I bought 2 subdivisions with them that they financed at 100% including vertical and one financed the lots with Zero interest financing for 2 years..   Etc Etc Etc.

Big banks only function for me when I have to put money into my JV partners accounts all over the country. for that we use Wells or BOA.. but only for those reasons.

So at the end of the day and in this environment I can get bank financing at under 6% for all my deals.. and in my market here in Oregon many builders that got hurt have had to borrow hard money to build. so there holding cost are double or more than mine which creates flexibility with pricing and or more profit.. 

@Kyle Kelley 

  got it then I think its your call on the 6k over the long haul and at such a cheap price point if your getting what you think is a great deal then your good to go.. could you do better if you said no?

@Kyle Kelley 

  that's your call... I think the more important issue is how are you going to manage these and are they in war zones and are you going down the path so many socal investors do when they go out of state.. and that is one of a lot more work than they thought  :)