All Forum Posts by: Justin Morris

Patrick G. thanks for the wisdom, let me just ask you a question though because I'm a bit unclear about this. Lets say that the total profit after its all said and done, ends up being 30k. Is giving

Partner #1 40%=12,000
Partner #2 25%=7,500
Partner #3 20%=6,000
Parner #4 15%=4,500

Not a good return for all investors? I mean making 12,000 on 65,000 after a 4-6 month period I would think is pretty good? No?

I've decided that I would like to expand my REI into rehabbing and I've started to educate myself around it with the intention of doing a rehab before the end of the year. I have three close friends/family members who are interested in being equity partners. One would cover the purchase cost and the other two would cover the rehab costs. How would you structure the equity split? What is a good ROI? Here are my thoughts and I would appreciate some feedback.

Partner # 1 65K(purchase) Equity Share 40%

Partner # 2 15K(Rehab) Equity Share 20%

Partner # 3 10K(Rehab) Equity Share 20%

Partner #4 Managing Project (myself) 20%

My ideal first project is:

3/2 SRF below 65K with an ARV of 115K or More

Max Rehab Budget 25K

Target ROI=25%

Does this make sense or am I totally dreaming?

Michael Siekerka & Sam Craven thank you both for your response and advice my appreciate

In terms of your point Mr. Siekerka, I do completely understand where you are coming from. I'm in a situation where I don't have the funds to contribute to a project, I have the knowledge and contacts to get it done and the family member in question has the money. They have done some conventional REI before and I believe that they would be more open to the idea of doing this then anyone else I know. I'm not only asking them to be a lender but to help me kick start my company but doing this first deal with me. I plan on being extremely conservative in picking the deal, it may take me a few months to find something but I'm not going to put the trigger until I find something that is going to work and make money. I'm looking for something I can buy at around 40K with a 90K+ ARV and no more then 15K in rehab costs(probably REO or short sale). This situation would be as following, my family member would receive 10% on a 6 mont note on his money plus a minium of 10% ROI. So I would like to make a minimin of 20K in profit in which I would split that with him 60%-40% and out of my 40 would come the 12% interest on the loan. This way they are making money two ways, with a interest rate on the loan and a decent ROI on the over all investment.

I've been doing lease options for the past year and now I want to get into rehabbing. I have drawn up a business place and am in the process of creating an private money investment proposal. I am going to send this out to family and friends that I think would be interested in becoming a PML. How do I present this to them? My plan is to use 100% PM to purchase, rehab and flip properties in the first year and then use 50% cash reserves and 50% PML after that. I was thinking of offer 12% interest rate with a 2% origination fee and no more then a 12 month note. I was going to compare this investment with others and point out the fact that you will in find returns like this any where else. Also, make a point that the money would be protected and always handled through a self directed IRA from Trust ETC. What else should I say in my proposal? My business plan already outlines everything they need to know about how I will do business and my goals.

Remon Rasho I've been in the game for 10 months now and I haven't closed my first deal. I've come very close to it, I.E having a committed buyer and then loosing them within hours. Real estate is a real business and as much as a lot of "gurus" say you can make thousands of dollars in just a few days with zero money while sitting on your couch that's really a brilliant marketing scheme that gets you to buy their $10,000 boot camp that will show all the secrets. You can make money, don't get me wrong and become wealthy over a extended period of time if you are smart but it takes hard work, creativity and constancy. I'm in the same position as you, I have extremely limited funding for my marketing but I keep on keeping on. I'm out every night from 6-8 knocking on doors trying to get deals, I post Craiglist ads three times a day and I'm always asking questions and getting as much help from other investors as I can. I go to every REI club meeting I can and I network, network, network. I tell everyone I am a real estate investor and that I'm looking for deals. I just continue to believe in myself and know that with hard work comes great reward. Keep at it, you'll get there.

Hey All,

I've been based in Brooklyn, NY for the past year and have been attempting to do Lease Purchase there. My wife and I have relocated to Hotlanta and I'm excited about being here because I've heard of the amazing real estate market. Like many novice REIs, I have no money to invest and want to get some cash flow going so I can get into rentals. Does anyone have any suggestions for me of what is working for them down here? Does lease purchase work? Are people in need of bird dogs? I'm ready to get to work! Thanks

Ron Climer Thanks for the advice, I pay my bills on time and have a credit score of 720. My concern is my income to debit ratio being to high and that I'm self employed. It seems I may have found solution and a perfect turnkey property in KC.

Simon Campbell Thanks for the advice, the reason I am getting into REI is because I have a lot of student loan debit and want to use REI as a vehicle to a debit free life. I also want to start to build long term wealth and be able to have something to hand down to my kids. I have over 100K in student loans so using 10-12k to make a payment towards them isn't going to make a huge dent, I rather put that money into a rental property that is going to generate cash flow for me each month and help pay my SL debit down plus up my credit score and as you said help my income to debit ratio. I want to buy one property each year for the next 5 years with a goal of a positive cash flow of 900-1400 by the end of that time.

I'm looking to buy my first rental property around 40-60k. I have about $12-15k to put down as a down payment but my credit is so so and I have a high income to debit ratio so traditional financing is out. What are my creative financing options? I'm looking for a long term loan so HMl are out of the picture. I was considering seller financing or PML what are people's thoughts? Has anyone been in this situation before? I'm open to any advice or help.

I'm interested in buying in buying my first rental property with 20% down and a 50k a 20 or 30 year fixed mortgage. Is this possible these days or not?

I've been seeing alot of seller financing deal lately, especially in the ATL area. I don't have a ton of capital up front to put down so I thought purchasing my first rental property this way would be a good way to go. For people who have done such a thing before is it a good choice? What are the pros and cons? Thanks.