All Forum Posts by: Manesh Hardeo

1 point is 1% of your loan amount. 1 point of $100k is $1000.

I don't know anything about that stuff Jordan -- I just defer to the CPA. It could be that I run a small business and that I'm in Georgia or a combination of the two, but it looks like it's a California specific thing from what I saw briefly.

If you have someone willing to lend I'd say 8-10% with 2 points is realistic. It's definitely much better than they'll get at any bank. With more experience I would not doubt being able to get better. You can also get creative by maybe offering 1 point up front and a 1 point on the back-end when you make the actual sale. As an investor looking for private money you can make the terms depending on who it is and if they agree, then great. Most cities will have well-known private lenders that will typically be slightly better than actual hard money lenders that you may be able to seek out.

There are many things you can do with private equity.

They'll typically go to an attorney to get a loan package put together with a security deed that would put the private lender in first lien position. If you seek out an investor friendly closing firm in your are I'm sure you can get someone to do that pretty easily.

Good luck.

Hard money is a great tool to leverage, and is a nice stepping stone to establish a portfolio to eventually setup using private equity.

Hard money lenders will have various parameters based on location. For example, in Texas they are very much credit-based, but here in Georgia they wouldn't have any borrowers if they weighed heavily on just credit. What they will want to see ultimately is this -- can you payoff your loan?

Do you have experience? Do you have enough in liquid reserves to put 20% down (usually required here in Ga at least) plus have 6 months in reserves for interest only payments and not put you in a tough spot. What house are you looking to borrow for? Are the numbers good on it? Do you have a good bid lined up with a trustworthy contractor? Do you have good supporting comps to support your ARV they're going to lend on?

Those are just a few things they'll want to know, but again...it's very much regional with hard money. Get with your local REIA and see who's lending -- I'm sure they would love to hear from you.

Good luck.

I'm licensed and have an S-corp setup, but I'm not sure if there would be any difference for your location? I'd ask a local CPA to confirm.

I agree with Mike. Starting out with your uncle could just be the kick-start you need to get your career in real estate moving.

I work with nothing but investors on a daily basis and many of them are licensed themselves. There are some advantages to having access to your local MLS to comp your projects beforehand, see the history, and the ability to list it yourself when you're done. This happens daily.

Learning the basics from your uncle or even growing under and/or with him is a great idea. Don't hesitate...just do it. I did 9 years ago and it's been a blast.

Good luck to you!

Like everyone else has said...competition is stiff. I own a wholesale firm that sells properties to investors like yourself and let me tell you it's definitely not easy. Just keep at it! Offer offer offer and put time into learning some direct marketing for motivated sellers yourself. Keep expanding your supplier network....that should be a constant.

I'm sure your local real estate investor association may have some local gurus that may have some classes that may give you some pointers.

James Vermillion

"I am not sure what you are saying...are you saying to include things into the contract as a motivator but do not follow through with it? I think it is pretty simple, treat people fairly. Pay a fair price, pay on time, and treat them with respect. If you do that you should have no problems finding a contractor willing to develop a great long term relationship."

Absolutely not -- Keep in mind I'm coming from the mindset of a wholesale firm that sells many deals monthly to various investors dealing with various contractors so every scenario is a little different. I agree with everything you said....keeping our relationships strong and communication lines open with our contractors keep them happy. :)

I don't really worry about asking price as much as I focus on my offer price. Your expectation combined with what the market dictates for that particular deal is what I'd put your energy into.

If the offer price is way under the asking price after determining your expectations and the market, then so be it....hold your ground. If it doesn't workout now, perhaps it will down the road. You said it...the numbers are the numbers. Either way, I wouldn't go outside of what you expect or pay more than market just to get a deal. There will always be another one...try to put the emotion aside.

Good luck with it.

@Jeff S

"I've tried this and I can't disagree more. The minute your contractor falls behind and realizes his losses will mount by the day, he'll walk. Similarly, no contractor can schedule his time perfectly and few seem to care. If he happens to finish early, all you did is waste money on a bonus."

Good point. It's not to be taken as literal as it is to be a motivator. The relationship is my focus personally -- they get grilled pretty hard before they even get a job and in understanding it's a long term relationship, not just one job.