All Forum Posts by: Isaac Dominguez

Hello everyone,

I just wanted to get your thoughts on a deal that I'm about to go forward with with a private lender if you want to call it that way.

Basically I was aproofed for 250k max with them covering 80 of the purchase price as well as 80% of the repair cost. 

The terms on the loan are a 12 months with anew 11% interest and a 2% origination fee.

I have 2 deals lined up that should cover pretty much 250k and or at least 200k... and hopefully provide a 110k profit between the two deals.

Wanted to get your valuable input on this approach of using private lending and if 80% for both the purchase and repair cost for a first timer sounds ok....

Interest seems a little high to me... it should get better once the dirt deal is out of the way..

Thanks in advance...

Hello everyone,

I just wanted to get your thoughts on a deal that I'm about to go forward with with a private lender if you want to call it that way.

Basically I was aproofed for 250k max with them covering 80 of the purchase price as well as 80% of the repair cost. 

The terms on the loan are a 12 months with anew 11% interest and a 2% origination fee.

I have 2 deals lined up that should cover pretty much 250k and or at least 200k... and hopefully provide a 110k profit between the two deals.

Wanted to get your valuable input on this approach of using private lending and if 80% for both the purchase and repair cost for a first timer sounds ok....

Interest seems a little high to me... it should get better once the dirt deal is out of the way..

Thanks in advance...

Hi All,

I'd like to get your thoughts on a property i came accross. It is a two Mixed use Building in which the first floor is a good size restaurant. Then, on the same building there are 3 rental apartments of 2-3 bedrooms each. Then there is a single home with a 2 car garage underneath the property. (first floor is the garage and second floor is a 3/1 apartment. It has plently of parking space and the condition is great on the outside and the restaurant is in great cosmetic conditions. They are asking 235k for this which i think is a little expensive,but it is still a good deal i think.

My question is, how can i go about getting a loan for this type of property which is considered a 5 unit comercial property. (this came from the person that usually handles my mortgage loans for residential properties and multi family)

What would be my best strategy considering that i dont have much capital to invest in this deal as most of my capital is tight up in a partnership which is still looking for its first deal.

What are the requirements as far as down payment,interest,closing fees and what other options besides commercial loans do i have?

If a PL was an option here, how do i approach them?

thanks

Thanks for the advice.. @ Jeff S.

I thought of using the loc's as a back up, but was suggested not to by other members of this forum, i guess because of the risk factor, especially for a newbie like me. Any other thoughts on this,,..

thanks!

Hello guys,

After reading a lot here in the forum, i was convinced that using my own money was not the best option for me to start flipping houses in a partnership with a friend. So after doing some thinking and analysis... i thought of this strategy

I have 50k Cash(which i'm not going to "use")

I have obtained 3 LOC's :

LOC 1 = 25k at 7.25%

LOC 2 = 25 at 8.25%

LOC 3 = 10k at 6.25%

I also took out a 13,000 credit card with no interest for first 15months.

My intentions are to take 25k from LOC 1, 10k From LOC3 and 15k from LOC 2 2 to finance my first deal.

Then i will use to the Credit card to pay the monthly payments for the LOC's which comes to me $1,000 a month, for the next 6 months(worse case).

This will leave me with out pockets expenses of : (for the credit card)

Month 1 = 20.00

Month 2 = 39.6

Month 3 = 58.81

Month 4 = 77.63

Month 5 = 91.08

Month 6 =114.20

Total: 406.28 over 6 months.

Projected profit would be no less than 10k..

Then i will use the projected profit to pay off or pat towards the highest interest LOC or even the credit card at that point...

I would appreciate any thoughts or suggestion. This is really my first time opening myself to using other people's money and getting myself into debt.

Thanks!

@Aaron Mazzrillo

Guys, I never thought of using credit cards this way..m pretty nice..

Now so you guys the monthly payment or do yo u wait until the end of the term?

Lets say you took a cash advancr of 25k at 2%...

Do you pay the mobtly minimum payment pf just wait till the end of the term to pay it all off, after your profit?

Thanks..

@Matthew Whitermore

I strongly agree. I met a real state agent that's really good who also happens to flip houses(which i'm not too confortable with...anyway) but she will be looking at properties for us and really norrow it down to the best ones and gives the numbers estimate and roughly how much will it take to rehab and how much she will listed for, and she guarantees that she can sell the property within 2months f being out in the market...

so that sounds promissing... she will get 5% of the resell price... but she's really straight forward and doesnt sugar coat things, so thats good.

@Ben Leybovich

I'm not contemplating buy and hold, only house flip/resale at the moment.

@Matthew Whitermore

@Anthony Dadlani

Great Stuff!!

As far as the stock market i'm a complete ignorant when it comes to the stock market. Although i have read and researched about it, i have always been afraid of jumping into it, and that's why my savings have always been sitting on a savings account(stupidly enough). but this is exactly what lead me to try the real state venue through house flipping.

Matthew, When you say a good exit strategy, can you elaborate. I understand the term, but when you do HML what would be a good exit strategy?

@Matthew Whitermore

So you think that using a private lender and paying interest on it, is a better option. Even when doing house flip/sale instead of holding?

So running the numbers... 50k at 16%, lets say 5 points...

5k down

Monthly payment of $600

My question is, do i pay the $600 from the savings or .....

So whith this option, by the time a sell the property, and lets say i get a 20k profit.

do i repeat the process paying down the original HMLoan, or do i use the profit of the first property for the second deal, that would leave me a capital of 20k + the difference left over from the original 50k loan.

@Anthony Dadlani

doesnt using HML limits my profit margin, and also incurs me more debt while the prop is being rahabed and sold?

Has anyone here use his/her own cash on the first deal? If so, how does it compare to using HML afterwards.

Thanks!