All Forum Posts by: Randy Thomason

Good luck LInda!

Different states have different rules sometimes and also competition from lenders.  In most of the states I do business in my PL's usually will lend me 100% of the cost and rehab because I am buying at discounts that doesn't over leverage the property or lender.  That's better that any DP!  Worse case scenario I come out of pocket 5-10% but that has been very rare.  

It takes a little time to develop the network of lenders but you should find 1 or 2 a month easily if you tell everybody what you do and ask them if they know anybody with capital they want to invest.

Keep it rolling!

Hi Leticia,

It is all about marketing as nothing happens without it.  You need to be maniacal about marketing to be successful.  Never stop, ever!

1- direct mail to list from list brokers 

2- driving for $

3- calling FSBO's and FRBO's

4- MLS

5- networking  (My favorite and I get 80% of my deals this way now)

6- meetings with attorney's and accountants

7- landlord association meetings- tired landlords

8- online PPC or FB ads

Enough to get you started and choices to work.

Happy Hunting out there!

Randy

Hi Linda,

Be careful of partners. Know who you are working with as you don't want to get caught up with someone with other legal issues or IRS issues.

You need to be able to fit personality wise and ethics wise.

You need a "drop dead" agreement in case you have a falling out down the line or one of you dies.  Do you want to be a partner to a wife or husband of you have never met and might not know anything about this business?  Or is a addict of some sort?  a drop dead agreement will allow either of you to buy the other one out in the event anything happens or you just want out.  Typically the way it works is either party can make an offer to the other and the second person can match the price plus $100 and the first party then must sell to the second.  No choice.  If the second person does want the property they can just sell at the original offer.  This keeps the first party somewhat honest as if the price is too low and is trying to steal it at a low price then the second party will buy it from the first.   

Most partnerships do split in time and a big majority are not friendly when done.  Been there, done that.  Even with family members it gets ugly oftentimes.  

As for looking for partners, I would be going to your local REIA meetings or Meetups and network like crazy. You do multiple things by doing this.

- You build your reputation

- you can build a buyers list or a wholesalers list of sellers

- you can find private lenders, so you won't need partners 

- you find mentors who are experienced

- and you will find deals

Happy hunting!

Randy

Hi Jonathan,

Could be many reasons or not a good reason too.

Possible reason to be wary of:

foundation issues

termites or other wood destroying insects

war zone

sink holes in the area

noise

smells from a nearby business

bad layout inside

But then again I have bought some off MLS that were great deals but were on there 6 months or more. Just go and keep your eyes, ears and nose open for issues. Ask the selling agent why i is not selling and if it has been under contract before and fell thru. Some won't say but some will have diarrhea of the mouth and tell you everything.

In this business you MUST adopt the motto of - You don't get if you don't ask.

Go look, offer if it looks good , subject to an inspection.  Seeing how its been on market that long I would be making a very low offer and they might accept or at least counter you.

Happy Hunting!

Randy

Hi Meredith,

That was a good one.  yes, sellers are everywhere and it is just a matter of telling EVERYONE what you do.  The majority of my deals now come from networking and the referrals network I have built over the last 4 years.

My strangest one actually came from a banker.  The lady had borrowed money to buy her house 10 years earlier but now as she had gotten older and quit working didn't have the income to keep paying.  She went back to the same mortgage department at the bank and wanted to give the bank back her house.  The loan officer laughed and told her they sold the mortgage two weeks after they made it BUT before she does the foreclosure or default she should call me and that I might be able to help her without any cost and save her credit.  sure enough, she called and I worked out to buy it Subject to.  Needed a little work (8,000).  Purchased for 45,00- plus 8k plus two months mtg pmts and sold it for 78,000.  Net 21,000 for two months.  Would have made a great rental but didn't meet my criteria for a keeper.  If I knew then what i know now I would have sold it with owner financing and made a tremendous amount more over the time.  

Deals are everywhere if you tell enough people what you do.

Hi Pat,

Sorry to hear your struggles but I hear this al the time from investors.  My words of wisdom(remember what the value of free is though, lol), is that you are fishing in the wrong pond. I know several Private lending companies out there across the country and a few are really good.  But most are leaving a bad taste in lots of mouths of investors.  too long to get funded, if ever, too many bait and switch as you have said, charging fees, etc.

Time to move to a different pond to fish.  Private lenders are the true way to go.  Build you network of PL's and you can get better rates, faster decisions (hours or a couple of days at most), no fees, no underwriting, no personal guarantees, close fast.  

Money is everywhere but it is camouflaged as every day working people.  tell everybody what you do and ask them if they know anybody who would like to earn 8-10% on their money flly secured by real estate for a short time.  They will all tell you no but the ones who have money will say- What about me?  I have some money.  It's funny how asking the question of who else has money brings the answers you want to ask, but if you ask the person directly they will almost always say they have no money.

If you join a REIA there are many people there who are private lenders but don't advertise themselves. They disguise themselves as investors and try to learn the doer's from the want to be's. Build relationships. This is what this business is all about. I usually pick up 100 to 200,000 in lenders every month or two and I am not out there searching often. But in this business you can never have enough money behind you, so never stop networking.

Happy hunting my friend!

Randy

Hi Douglas,

Not a bad deal but a lot of work for only 10,000 profit.  Just an idea for the future for you to help you make more money  on deals like this.

1- Shop the note around more.  The discount you took was quite high, unless there are some things I'm not aware of like it was overpriced vs true value.  If you have a hard time getting better prices let me know as I have some buyers all over the country who are aggressive on pricing.

2- On a deal like this are you aware you could probably have sold 10-12 years of the note payments for the same price and then gotten the final 8 years or so back to yourself?  It's called selling a partial.  I do this all the time.  In this case if you had done this you would have gotten another $61,000 in payments for the last 96 months. (96 x 636)  Free money and a nice way to build a retirement income down the road with no extra expense out of your pocket.

Great job anyway.  You made a profit and can move on to the next one.  I am sure you learned something on the deal as everyone has teaching points and ways to improve on the next one.

Happy hunting!

Randy

Hi Brian,

Have you thought about owner financing it back up at your original price with a higher interest rate?  Advertising it as no banks needed, owner will finance with good down payment.  You might be surprised at how much down people have. No vacancies, no repair or tenant calls.  After a couple of months if you want or need to sell you could possibly sell the note or just part of the note to recoup your investment.  Just one program I use occasionally.

CAlling all new or recently started investors.  we meet the first Wednesday of each month to discuss how to get started, what steps to take, marketing, things to be aware of, staying legal, and many other things.  Come join us but seating is limited to about 30 each month.  Bonus- The pizza is great too!