All Forum Posts by: JM Payne

Honestly with no experience, you are not likely to find hard money without paying through the teeth.  Whether or not private money is an option depends on your personal network, your ability to sell, and their trust in you.  You likely need to do both; start analyzing deals so that you can see the good from the bad. 

Also know that investors don't necessarily start out looking for private or hard money, but often choose to go that way with mortgage caps and whatnot.  Personally, my lending to date has all been through conventional banks and I have declined private money from people that want to invest until such time that I am ready to deal with "partners."

Find a mentor or a local investor to work with that doesn't mind looking over your shoulder, or read the wealth of information that is available on here.  Also, begin accruing cash if you have not already....just realize that the financing won't come without deals and starting out you don't know what a deal looks like.  I hope that helps.  Stick with it, read lots, and develop a strategy and you'll do great.  Good luck!

- JM

Great deal background, but what's YOUR background?  They're telling you that you don't qualify, not the deal.  The short answer is that you need to find a new lender, and you need to find out exactly what about you doesn't qualify and what you can do to rectify that.  Without more cash, you are probably stuck.  If it's truly amazing, maybe you can assign it for a fee and pocket some quick cash for the next amazing deal?

I hope that helps.

- JM

30,815 is your cash out, but the heloc payment on the backside goes into your expenses column right next to cap x, vacancy, repairs, and management.  So:

$1320 Gross - $661 mortgage - $300 Heloc Pmt - $264 Hold backs (5% ea/Vac,Mgmt,CapEx,Repairs) = $95

$95 * 12 = $1,140

$1140/$30,815 = 3.6% CoC Return

I hope that helps! You can mess with the numbers all you want (IE argue that vacancy won't occur or you're self managing,) but that's just trying to sweeten a bad deal. Even at 15% hold back, you're still only @ 6.2%. I would try to both negotiate a lower price AND look for value add through rent increase, if possible. YMMV...some will tell you that cashflow is cashflow, but you have to make that call for yourself. Obviously your CoC will jump up quite a bit at HELOC repayment.

I hope that helps!

Welcome back.  Where'd you go for 6 years?

Sounds like a solid plan, go act on it!  Are you going to drive for dollars, do mass mailings, or generate your leads via lists?  Remember, where goals, plans and action intersect is where success occurs.  Make your goals, crush them, and don't get lost again.  Have fun out there!

- JM

Good evening; you should always refer to your state mandates when it comes to Landlord/Tenant law, but I do not think that you would find ANY state wherein a Landlord cannot require insurance. In fact, Landlords should not only require this but add that the tenant must include listing the Landlord as an additional insured on the policy as this gives you an additional layer of insurance. I'm sure that if you explained the requirement as well as the low cost of this insurance and what it provides for your tenant, she will see the benefit. If she does not, you cannot change the lease until renewal, but at that time, you may make this a requirement.  I hope that helps!  Good luck.

- JM 

It's a sensitive time.  If you knew him, perhaps you can reach out to the family with sympathy and begin to build rapport by offering solace.  The probate process is generally long, so you're better off being patient and being a good neighbor. 

Also, depending on county, wills are often recorded...you can go to the courthouse and see where the property may end up and who the attorney is.  Contacting the attorney separately will be a better way to approach property acquisition, but estates have 7 years to settle, so it may be a while.

I hope that helps.  Good luck and cut your grass! :-P

- JM 

Consult the local municipality's Comprehensive Plan, which will give you a 5 year overlook of where they are headed and should be available online.  Additionally, you can look up the current zoning to determine what is allowed and what is not, and then call the development office, tell them who you are and what you want, and see if it is in line.  You will be dealing with them many times over the course of a project, so it's good to go make friends now, whether you buy this subject piece or something else down the road.  Have fun, go kill it! I hope that helps.

- JM

No problem at all!  If we helped out, please consider clicking the up vote button on the left below our profile pics.  Have fun out there!  Develop your plan and go crush it!

- JM

Investment Info:

Single-family residence fix & flip investment in Gloucester.

Purchase price: $98,500
Cash invested: $26,401
Sale price: $175,500

VA foreclosure fix and flip, first time deal. SFR, 3 br 1.5 bath, 1 acre, 1100 sq ft. Mostly cosmetic/updating, although inspections turned up low water pressure in the well and a seized compressor in the HVAC unit. Have been able to fix both issues ourselves, saving considerable amount of money, and are leveraging sweat equity. Intended on-the-market date is 1 Mar 2019.

Update: Never went to the market. Sold the house to a retail buyer off the market.

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

MLS, toured the house during a hurricane so we had it under contract at ask before anyone else could even tour.

How did you finance this deal?

Cash from HELOC on another property, then interest free promotional discover card.

How did you add value to the deal?

Rehab

What was the outcome?

Cash money in my pocket.

Lessons learned? Challenges?

Tons of lessons learned. I am happy to discuss further with anyone who would like to reach out to me.

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

Yes!

Buying Agent: Vince Campana, C&W Real Estate
Selling Agent: Toby Jordan, Liz Moore Real Estate
Rehab Management: Virginia Payne, Liz Moore Rentals

Honestly the second a real estate agent tells me that I can't do something, it's time for me to find another agent.  Not only is it possible, it's the best way to start out.  I had an agent one time tell me that I shouldn't even tour a house because I'd never get it financed.  It turned out that she didn't want to meet me at 0700 to tour the property, so I fired her, toured the house the next morning at 0700 with an agent that didn't mind getting out of bed, and had the contract out by noon.  Go find yourself a new agent and kill it. I hope that helps.

Regards,

- JM