All Forum Posts by: Pat L.

We had a 4 ft walkway when we did the barn job & he just went under it with a tool that he pushed/drilled through with. I wasn't there when he did it but it was a nice 8" tunnel through the clay
But he did skirt the 20x20 concrete pad out side the barn entrance.
The same guy also did a complete sewer pipe replacement with a check valve & several hookups.
He took out the entire width of the basement floor to the basement wall perimeter. the city paid for the sewer upgrade to the basement wall.
Total cost $5000.

We shopped around & had an old plumber do it for $1500.
He rented a ditch witch on my dime but he paid for all else.
Replaced the entire line but we didn't have the walkway etc to contend with.
We also had the same guy run gas & water to our barn 250 ft cost was $1200.

What I am finding is a lot of clients out there don't know if they will qualify & then they meet an agent who insists that they are pre- qualified before they will even bother showing them homes. Appeal to these & hopefully many will qualify for what you can get them into.
One of our biggest referrals is a couple of mortgage brokers who don't nail them with origination fees but are inundated with young kids trying to get into a home of their own as rents are higher than a mortgage pmts.
I am surprised by those who I sell LTO homes to. They pay on time & who did not for some reason qualify for conventional financing.

Fast food franchise !!!
The builder/renovator I use is back busting his hump because the two franchises he had over 8 years drove him into bankruptcy. Just managing low income staff even with a high Paid manager was a nightmare.
Around here the little Greek style family 'greasy spoons' (no offense to any Greeks out there) make a fortune but again the owners is there constantly.
We have a Chinese surgeon friend, (husband is
an engineer) & they had 6 Chinese Restuarants. Lost one to a bad fire, their insurance was not
adequate & they sold them all off to recoup. But
they could bring in 'reliable/ always there' staff
from the homeland on special visas.

I concur real estate is the only true passive game depending on how you play it.
I ONLY do LTO's & hold investor flip financing @ high interest %.
I am mentoring a young Marine (oldest daughters boy friend) about to be deployed to S. Korea. I set him

up with a rehab then LTO that will return him 21%.

I am content with the several I have.......
My strategy is to leverage & refine the ones that work.
But, (conservative forms of) Option Trading, (definitely not for the faint hearted), is the one I enjoy the most.

I just did a LTO on a SFH to a desperate mother of two.
Wife of 15 years was left paying the mtg after husband bailed with a younger conquest.

The wife went to family court & was informed by the judge that she was never on deed, never on the mtg. All equity has been stripped by husbands bankruptcy because of the marital debts he ran up.
The place has been sold & she had to be out by Jan 23rd.

So it will probably go to family court before it's resolved.
The wife's credit is ruined & she works two jobs in an attempt to recover from the financial trauma.

I stay In touch with our building inspector(s)
He is a wealth of knowledge

Rodney

I do a lot of HML to fellow investors that have sat down with me with a business plan (sometimes on a napkin) & the capability to do the work. Their credit (unless it can attach liens to the property) is not a major concern to me.

For example the wife & I go to our local tax or property auctions & sit there with the bidders (after we have est a good price for a home based on its condition etc). We finance the initial buy up to 90% (they need their money to rehab the place). Some I also insist on taking a % interest in the final profit on the re-sale (one of my LLC's is on title). Sometimes I also finance the rehab costs.
Then I give them 3-5 months to start paying (BUT interest is accumulating). By then they have it rented, flipped it or refinanced.

We do the same for foreclosures we find &/or properties they buy for their kids to get started. I have one contractor friend who is close to retirement with nothing saved. Both he & his 3 kids are NOW on-board buying & re-habbing properties that I finance. His 23 yr old daughter bought her first @ a tax lien auction for $12,500, stripped to the studs. She (& her dad) did an amazing job & she is a $13.50/hr manager @ the local sub shop. (I also financed $7,140 in re-hab costs). Completed it was appraised @ $58,000, BUT even though it's her PR she still couldn't get conv. financing !! (credit score issues).

Given the returns they are realizing my 14-15% is not an issue (but a couple of the wives get annoyed. In fact I no longer deal with a couple of great guys because their wives were intolerable).

One investor had no problem using the 14-15% to accumulate several MF units. The interest rate was the least of his expenses. In fact I believe on one 7plex his monthly insurance premiums were higher. Admittedly these are NOT 6 figure properties they are acquiring.

In fact many keep the properties with the high % interest in place for several years because their returns are so good & re-financing investment property is tough if you're @ 90% LTV.

If these guys sat around procrastinating about interest rates they would have missed so many deals & a lot of income.

The bottom line is Private lenders are out there & hopefully you will find one who will listen.

Good luck

As a heads up this may be of some help to those out there looking for those elusive deals.

For several years now I have had the word out that if a place fails to close @ the table I want to know. I have sourced several RE agents (a failed close usually gets a lot of talk going between agents) & my RE attorney's para legal (her husband is a re-habber & she tweets all the other para legals in town about deals).

I have nailed some really good deals & depending on the sellers circumstances I go in really LOW & wait.
We have also picked up some foreclosures that got into trouble trying to get deals to close. We stole 2 properties one from the VA & another from a bank in Texas. (Both had several failed closes due to property conditions.)
The VA one took 4 weeks before they came back @ our price (middle of winter school taxes due & the kitchens in both units had been gutted to the studs) but the Texas bank agreed to a verbal over the phone as we had our potential buyer walking through it with his dad.

Also estate sales with out of state heirs. They just want to unload & have little patience for a failed close.

I also have my title guy keeping an eye out for problem homes. Given all the money he has made from me he owes me some heads up on potential failed sales &/or foreclosures. In fact he informed me that a couple of neighbors in large homes were in trouble but apparently they renegotiated/modified their financing.

Also a local police officer (I financed his rental) is a great source of abandoned or persistently vacant &/or deteriorating properties.

It's amazing how many people out there just get so exasperated with their experiences with bad tenants that they would prefer to let the property sit & deteriorate hoping for prices to go up.

Good luck

$30 a hour & he pays his helper(s) from that, but I keep tabs of the time & project finances. For a project we need to finish quickly I throw in a good bonus to get it done on time.
He finished a job for me once that basically saved me $6,000 as it was necessary to get the property to code to close immediately or lose the deal.
However, I have used temps to do whole house carpet rip outs & wall/kitchen tear outs & the ever horrible basement clean outs. Its relatively cheap labor given the bull work required.