All Forum Posts by: Justin Madison

Hi @Jason D..  Thanks again for your feedback.  Good thoughts.  From the feedback I've received thus far, I'm not sure I'll be doing this deal, as it seems like more risk than I thought.  As for me, I've struggled with getting started.  I've been learning for the last 2 years and been wanting to jump into the action for the last year or so, but have failed to get started.  I have had difficulty picking a direction because I'm interested in so many facets or strategies of real estate investing, such as single family homes, multifamily, short-term-rentals, notes, lending, etc.  So I think I've had analysis paralysis.  I was explaining this to this flipper and afterward, he offered me this deal to lend to him on his deal...  Since I'm new, I thought it would be a good idea to fly under the wing of one more experienced to learn under.  But, of course, I want to be wise and have understanding of what I'm getting into before I invest.  Thus, this post.  I'm extremely grateful for all the wise feedback I've received thus far.  It's helped me really try to understand the risk of being in 2nd position, as well as discern whether this is the right way for me to get started.

Here is the Scope of Work with the budget for the Rehab.  What are your thoughts?

Hi @Ryan Dossey, thank you for the question.  Yes, is there any risk on this besides having to keep the 1st mortgage payments current for the duration of the deal?

Hi @Wayne Brooks, thank you for your feedback.  In the 2nd page of the offer, he says "Security Instruments:  2nd position Deed of Trust, Promissory Note, Named as addtional insured."  So yes, it's a 2nd mortgage.  Other than him defaulting on the 1st mortgage payments, is there any other risk with being in a 2nd mortgage position?

Hi @Jason D..  Thank you very much for the feedback.  I met him at a local real estate meetup eariler this week.  I've seen him there several times before, but we never met until this week.  He's an active flipper in the bay area and buy-and-hold investor in Tennessee.  We don't know each other very well but have some mutual friends in common and they speak well of him.

We started talking at the meetup this week and I told him I had not done a deal yet, but have been learning for about the last 2 years and want to get in the game.  So he put this offer together for me to lend on his flip deal.

The $752,000 is a loan that he already obtained.  Perhaps a private money loan, not sure yet where he got the loan, but it has 2 points and interest rate of 9.25%.

One concern that I have is that if I lend him this money, he will have very little of his own money in the deal, so he won't have much to lose if the deal doesn't go well.

I'm not sure why he is offering me 12% interest if he can get cheaper money elsewhere.  Do you think I should ask him that question?

By the way, the pictures of the deal that I posted above came from the flipper.  This is the deal he is offering.  Thanks for your feedback.

Hello BP Community!  

I'm still fairly new and have a deal that I am considering.  It is with a local flipper who is quite experienced.  The deal is to lend him $200K for the duration of the project with the expected duration being approximately 6 months.

My goal is to learn and make a profit while doing it.  This project will be with a very experienced rehabber to take care of any hiccups that we could find during the process.

I am offered full access to the project and property, so I can decide the amount of my involvement in the project. We will have all documents on a Google drive, as well as weekly pictures. That way I can have all of the access available for you to learn as much as possible during the project, while still making a very nice return on my money. 

Appreciate your thoughts.

Does anybody know of a spreadsheet or software that can be used to collect information on a property for Driving for Dollars?  I'm looking for a spreadsheet to gather info such as square footage, bedrooms, lot size, amenities, sale price (if applicable), rent price, comps in the area, etc.  Thanks in advance!

Hi @Jeff Wallenius, thanks for the feedback.  No, I've read about them and talked with others who have lots of experience, a but never done a flip myself.  If I were to have done the deal, it would only have been by partnering with some more experienced investors and flippers that I trust, including the developer.  

@Dominique Van Ryckeghem. This particular house is sold, so it's no longer available, but the address was 848 College Aveunue, Palo Alto.

Hi @Doug Woodville, Thanks a lot for your input.  Those are great things to consider and I've been thinking along the same lines.  Thanks a lot for the affirmation.  God bless you and all the best to you!!