All Forum Posts by: Douglas Larson

Justin, Ned nailed it.
If you are bird-dogging deals (wholesaling), Ned's questions and concerns are the same ones your investor/buyer will have.

Property 1 could be a good value for a long-term hold investor if small units are in high demand (such as in a college or a resort town), and if zoning allows for multi-family. Still, the price needs to be lower if you want to wholesale quickly, make your cut, and still provide a great value to the investor. I have created functional multi-family housing in Hawaii by compliance with local laws which allow smaller "Ohana" units to be created within a single family dwelling, so long as there is only one Stove/range in the home and there are not more than 5 unrelated occupants in the dwelling. The "Ohana" units can have a kitchenette including a microwave, fridge and hotplate but but not a range. This type of reconfigure can add value in some areas but in others it can REDUCE the value of a home. You just have to know your market!

Property 2 could also be good but it sounds like a tough first deal. I'm not in your area and I have zero faith in anyone else's "appraisal value" but I love land deals where value can be created by subdivision.

Still, your biggest obstacle with be no cash to prime the pump. If you don't have at least a grand for earnest money, most sellers will not take you seriously. Can you borrow some cash from a family member, friend or credit card to cover an EM check? A pretty check is all that's needed to show a seller you are serious but when a contract is signed you have to deposit that check with an escrow or title company, along with the contract.

I absolutely applaud you for jumping in, even with little money or experience. Every investor starts somewhere! As a bird-dogger, the key is to be able to tie-up AWESOME deals that are truly irresistible to your investor list.

Have Fun and Make Your Own Luck!

I don't know the Florida market but Most hard money terms I see out west are 60%-70% of ARV (After Repair Value), although often their valuations tend to be on the conservative side. Then, there's the 2pts (2%) origination fee and about 12% APR interest-only payments each month. A six-month term is common and with another 1% you can usually re-up for another 3-6 months after the first six. Make sure to negotiate that option up front.

Most hard money is a close variation of this theme, at least from what I've seen and used in Utah, California and Nevada. Many private lenders will reduce the origination fee and the APR on your 2nd or 3rd deal with them. Again, ask about this up front. finding a good, reliable, fair money source is crucial to success.

My last deal with hard money looked like this:
60K purchase price
45K borrowed - Hard Money
2% origination = $900
12% APR or 1% per month payment =$900 for 2 months
No renovation costs
Sold in under 60 days for 78K
Net gain = 11K after commissions, closing costs, loan carry.

Have fun and Make Your Own Luck!

SoCal is expensive and getting worse. Riverside county has a lot more opportunities than coastal though. Wholesaling is a great place to start if you have time, persistence and great organization. Some of the BP Podcasts have spelled out the process quite thoroughly so that's a great place to start.

Wholesaling in a different state might be very difficult as most offers and contracts need face time. If you don't have a private jet then you'll need some soldiers in the ground in your target area. I have made lots of offers across state lines but only contingent on getting my own eyes on the property.

have fun and Make Your Own Luck!

If you have 2 dozen applicants in the first week then ask for the moon!

Customary is usually 2 most recent paystubs and a credit report, along with the usual references and details of a good rental app.

Welcome to the most helpful real estate investing site on planet Earth. If you are looking for practical application knowledge you must also listen to the BP podcasts. They are really excellent.

I've also heard good things about the SLREIA but have never attended. Maybe I'll see you there one of these days.

Have fun and Make Your Own Luck!

I like your idea to keep em for a while. You didn't say where these are and how your home values are trending. Many areas of the country are looking at 8-10% price increases in the next year.
****check FHFA.gov *****
It's getting harder to find sweet deals and with low interest rates and a good cashflow you can make thousands in equity just by not selling.

"It takes twenty years to become an overnight success."

- Eddie Cantor

I did 3 fix&flips in SD North County in 2011-2012. The best deals I found were at Marjan Stone. I worked with the owner "Akmet." I gave him the measurements and his guys loaded the finished product into my trailer for less than half the price of custom installs. I had to install it myself but all the pieces fit perfectly every time. I think they moved recently to Spring Valley.
http://www.marjan-stone.com/

I prefer "absolute black" with white, shaker-style cabinets or "Santa Cecilia" or "Giallo Ornamental" with darker cabinets. I order the "flat polish" edge and use the IKEA DOMSJO double-bowl kitchen sink usually. Marjan will also cut and polish inexpensively for a stainless undermount sink.

This was one of my renovations.
http://www.redfin.com/CA/Carlsbad/2984-Lexington-Cir-92010/home/3421224
Marjan did all the stone for kitchens and baths for about $2K. The Master vanity top is Santa Cecilia and the rest is Absolute.

Have fun and Make Your Own Luck!

Most hard money terms I see out west are 60%-70% of ARV, although often their valuations tend to be on the conservative side. Then, there's the 2pts (2%) origination fee and about 12% APR interest-only payments each month. A six-month term is common and with another 1% you can usually re-up for another 3-6 months after the first six. Make sure to negotiate that option up front.

Most hard money is a close variation of this theme, at least from what I've seen and used in Utah, California and Nevada. Many private lenders will reduce the origination fee and the APR on your 2nd or 3rd deal with them. Again, ask about this up front. finding a good, reliable, fair money source is crucial to success.

Have fun and Make Your Own Luck!

Thanks for the heads-up on the new regs. It's always maddening when a smothering blanket of new rules is applied to a whole industry when only a few irresponsible entities need a spanking. Over the past few years I have been increasingly frustrated to find that conventional investor loans are simply unavailable to someone like me with great credit, no defaults, and a 10 years experience. I don't fit the tidy conventional box though as my income and capitol gains vary greatly from year to year. Such is the environment that creates the need for private money loans. Something you seem to know a little about.

Thanks for the article.