All Forum Posts by: Manny Rodriguez

If its an expired listing then you wholesale it just as you would an off-market property. However, the active listings are 99.99% of the time already seen by every investor country-wide that's looking in that particular housing market. That's why its still actively listed and waiting for a non-investor to come along to purchase it.

Kudos,

Mary

Welcome Manny, I'm just outside of St. Louis in the Illinois side suburbs.  Enjoy the site, it's packed with valuable info and a great network of people.  If you ever want to grab lunch and chat real estate, send me a message.

Real Life of a Private Lender - Business Update Week #2

MAKING GOOD LOANS
We have been approached by a borrower from Cincinnati, Ohio about this deal:
Property is worth $250K
Acquisition: $145K  (this is the loan amount needed)
The borrower has a buyer lined up for $168K but his buyer needs a bank loan. The borrower needs the $145K at the most for 60 days or while his buyer is getting qualified for financing. The buyer's bank requires the seller to have the deed to the property before they will lend money to the buyer. Hence, the borrower needs to borrow $145K. Here's our decision regarding this loan application:

YES IT'S A DEAL - Lenders always take risk into account and we want to mitigage the risk as much as possible. This loan is worth doing because the LTV is good ($145K/$250K = 0.58). There's a buyer lined up so we have an exit strategy that is well defined. So, the only risk is if the buyer does not get qualified. Hence, in addition to ordering an appraisal to verify the market value of the property, we'll talk to the underwriter of the bank of the buyer to be sure that he will be able to get financing. If there's a higher than 75% chance that the buyer will get approved, we'll likely fund the loan.

Real Life of a Private Lender - Business Update Week #1

RAISING CAPITAL

We don't need additional capital right now as we have plenty. However, as a wise investor pointed out: You have to dig the well way before you are thirsty. So, we are always raising capital. How do we do this? Networking with other real estate investors.
In raising money, I don't go in front of a room full of people and ask for money (nor do I pass out flyers saying I need money). That's asking for trouble with the SEC because you might be deemed as selling a security. Instead, I talk to people one-on-one and get to know them first. I find out what their goals and dreams are. I find out what help they need and I genuinely help them. I sometimes find resources for people and I refer them my dream team of real estate attorneys, title companies, investor-friendly real estate agents, contractors, lenders, etc. I don't even talk about my lending business or my real estate business. When I network with people, it's not about me - it's about the person I am talking with.
Then I follow up and build the relationship through constant communication. Coffee meetings, phone calls, etc. I am willing to be patient and invest the time. Months...even years of building relationships are all worth the investment. When you have a pre-existing relationship with someone and that someone invested money with you or lent you money, the SEC does not frown upon that.
I am willing to plant the seed of goodwill (through networking as I described above) and water it (through follow up and building the relationship). I might do this with 100 people and only 1 will invest with me eventually but if I've helped all 100, it's ALL worthwhile. Real estate investing and lending money is fun but what makes it even more fun and worthwhile is if you work with people you trust and like. In the end, real estate investing, lending or any business is about relationships.
So dig a lot of wells NOW and if you do it right, you will not be thirsty of capital :)

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