All Forum Posts by: John Miller

On any given investment opportunity, you have to evaluate what your expected returns are going to be, and then you consider the funding source. if you are looking for 15% and greater, then you would have to realize a 30%+ return if you were going to JV. If you know you can get a deal on a property that the NOI can carry the note, then look for private money, before you look for hard money, or look for a JV to go with you on the purchase, writing the duration in the agreement so that you can buy out your partner after a period of time. there are cash flowing opportunities out there, where lenders would be happy to rake you across the coals. there are so many lenders available now, just watch for the frauds, you are really in the drivers seat, you set the terms, and dont get pressured into a situation that would jam you up on a balloon.

have you folks looked into investing in non-performing notes? trading paper is a very lucrative investment. we JV on notes, and our investors are realizing double digit returns. for those who are interest in passive investments JV'ing on notes or CFD's is an excellent move.

Business plan is crucial, financial forecasts and cost projections coupled with a strong bio in business management and an executive summary that lays it all out. Truly right now there are more lenders available than there are borrowers. Most possibly because they are unaware of the private money available.

The answers are all great, and good luck in your venture.

REO's are great investment opportunities. To grasp why a home would go into default then foreclosure, that eventually leads to the property being an REO, you have to wrap your mind around the dynamics of economic trends in this country. In the early 2000's there was a supply and demand situation across the US, thus creating the bubble. Houses and developments started popping up everywhere, property value on existing homes went through the roof, HELOCS and 2nd mortgages were being taken out on homes, and the money was used friviously financing cruises, international vacations, and time share purchases. I will talk on the subject of the existing home for a moment. These houses were most likely purchased in the late 80's early 90's, and seen an increase of $100-$200k,from their purchase price. The owners refinanced pulling the equity and essentially Pissed the money away. The loan was structured with creative financing hence fraudulent, to have a lower payment for X years and a balloon payment due on a specified date. The home owner in their haste to enjoy the unforeseen windfall, became oblivious to the lurking storm. 2008, the economy tanks, hundreds of thousands lose their jobs. These aforementioned balloon payments are coming due, the soul income earner has succumbed to the recession. Unable to make the balloon payment,and depleted the HELOC, the house refinances at a higher percentage rate and an ARM. Interest rates increase, and the homeowner can't make the payment. Lending has ceased, the banks are not lending,jobs are still scarce, and the foreclosure process begins. The house doesn't go on the market, or maybe it did, but the recession has caused the value to decline and the market is in despair. The owner is upside down on the house, and. cannot sell for what is owed. In this economic downturn the investors were redirecting their assets to metals,because real estate was sinking. Once a property is in foreclosure, certain loans are garaunteed by our federal government. The lender would be me paid, and part of the complexity of those politics requires the house to remain off the market creating the REO. After the one year the home which is but a spec in the pool of foreclosed homes, are offered in bulk to wholesalers who in turn provide discount prices to rehabbers, eventually recirculating the property.

I will stop with that but the other part of the story is the new homes purchased in abundance, that became REO.

As an example,I had an REO on discount $770K, that required no rehab, and brought +3M.

There is a lot to comprehend when exploring foreclosed properties and REO's. I hope this long winded response shines some light on your inquiry.

I am hitting the second question. To create an entity LLC, or go it exposed?

I tend to prefer establishing a legal entity, in order to separate personal assets from the project. Create and dissolve, and close the books on it. I have worked with developers who use this model, developing several projects at one time, and hiring the primary corporation as the PM. If things run south,such as they did in 2007-2008, you are protecting your personal assets. Too, you never know when that slip and fall may show up at your property.

the project itself may not be too much, but the estimated costs may be eluding you.I have 35 years in construction, and sometimes what you uncover was better left covered.

To me i try to stick with the 30% rule which has clearly been broached here. I know from experience, that older homes are a challenge, but are approachable. Your MEP's need your full focus, ensuring you are able to stay within your budget.

Good luck, id like to know how it turns out for you.

a bit morbid, but watch public records for divorces and deaths. Join a few military forums and blogs, offer to buy and close quick im sure you will get bites. Using MLS is the status quo in the US.

You could network with HOA's and community organizations.

a bit morbid, but watch public records for divorces and deaths. Join a few military forums and blogs, offer to buy and close quick im sure you will get bites. Using MLS is the status quo in the US.

You could network with HOA's and community organizations.

a lot has changed from four years ago when this article was written everybody and. Their dog is now the source. And JV programs are on every corner. Instead of crowdfunding you have two pool together and make hue transactions.

The rehabber market is folded, but nobody is giving direction to these new entrepreneurs. I will be working on so projects where we are basically designing our own customize loan package. There is too much money to lend and not enough educated borrowers.

If you have the drive to get something done it will happen.

HML on a buy n flip is the fastest way to go to get your purchase funding and rehab money so you can get your return. I wouldn't recommend it for greater than 24 months.

If you need further information I have just started putting together articles on that very topic

https://www.biggerpockets.com/forums/48-general-re...

That is a post I just out up.