All Forum Posts by: Rich S.

@Account Closed  I'm not well versed in the teaching of Dave Ramsey, so I don't follow.  

My fundamental thought with this thread is relates to we seem so driven by the data, numbers, deal, we forget to stop and learn from the people.  There is no doubt systems, numbers, costs, all that stuff are crazy important, but I think learning from the right people is more important... again, just my opinion.  Bigger Pockets has allowed me to see that in a numbers driven game, there are still lots of great people, you just have to find them.  

DISCLOSURE: I am a newbie of newbies, who wants REI to be the vehicle to provide income to provide a better life for my family and to fund a better retirement down the road. I am most interested in the power of choice, having excess money provides.

After listening to Podcast #222 featuring @JayHinrichs last night and then spending a little time on the forums, some things really hit home for me:

#1- Take advice from people who aren't trying to sell you something.  I've never once seen Jay, along with others try to sell you on their strategy or their products(if folks have them) when offering advice.  You are just getting facts based on experience to do with what you want.  Paying attention to the right folks on the forums provides the knowledge of tons of resources all in one.

#2-LISTEN to the folks who have been in the game for a while.... they've been through so much, they understand the great times don't last forever.. they prepare for the not so great, they change strategy and they admit they've lost, gotten beat, etc.  Their approach is "pressure tested"... it's been through all the market/economic changes.  It provides a model of HOW to last in this business.

#3-Look for folks with integrity... in today's world, we go so fast and are so driven on results in any arena, we forget about the PEOPLE.  In listening to podcasts of the folks who've been around and seeing what they say when posting, they've all been great at building relationships with key people, fostering those relationships and to be frank, they have no GAIN by spending time on the forum helping us new folks, but they do.  Call it karma or the golden rule or however you want to lay it out there, real estate works for the folks who treat people the right way, folks who are genuine... sure they miss a deal to the person who beats them from time to time, but their conduct, acumen, character always performs in the long run, provides staying power.

#4- THANK YOU to these folks for all they do... I don't think you realize how much positive impact you have on the "little folks".

Good day all.  I'm just curious what various lenders would be looking for in compensation and structure of this deal:

Purchase Price: $25,000

Rehab/Holding/selling costs: $30,000

ARV/Sale Price: $85,000

90 days for purchase/rehab/sale

**My questions below are coming from the scope of my view that a HML being a formal institution/group with a bunch of standard terms, processes, etc... and a Private Lender being someone with money, willing to loan it short term, without all kind of formalities(if that makes any sense)

So in a HML world, 65% of ARV would be right at $55,000... does anyone does this deal without requiring rehabber to have skin in the game? If so, what are typical POINTS and interest fees? Would HML require reserves? Basically would above deal be doable and how much would it cost?

In a private lender world(I mean less formal, less of a business type approach more of a guy/gal with lots of cash) If you could land a deal to get the $55,000 to buy and rehab, what would be a reasonable return/terms for the private lender to do this deal?

I'm trying to wrap my head around varying ideas/strategies etc, to move forward with in regard to deals that come up.

Thanks for any information/thoughts you can provide.

I think the key point to the Financially Independent portion is YOU DON'T HAVE TO... meaning, folks in the FI category DON'T HAVE to go to work if they don't want... they DON'T HAVE to find more deals... the DON'T HAVE to take orders from someone else to survive.. etc.  I think the biggest thing FI gives you is the power of choice, to do what you want with your time.  From what I can gather on the forums and listening to podcasts and such, is the folks who are uber successful really love the arena of real estate OR love it while focusing on knowing what it can do for them.  For me, if I don't go to my W-2, my kids won't have enough food on the table, clothes on their back, their won't be gas in the car, etc... the GOAL for me is to not have to worry about those things, because I have a better plan than a W-2 job in place, to provide those things.  RE will eventually be the avenue in which I can create more flexibility and choice with my time, endeavors, etc.  I don't think just building wealth and doing nothing or recreational stuff all day long, is near as rewarding when you don't spend time in the grind sort to speak.

I have no experience in deals of this sort, but the premise that the broker is taking no blame, nor is she placing any on the agent AND using her personal history of relationship with you in her response would give me enough principle to not go quietly.  She's hoping she can use her personal history with you to have this go away... I'd call her bluff.  

Good day BP.  I have been working to get info on a potential deal that finally came today(this property sure shed some light on why some properties sit for so long... trying to get info from listing agent was impossible, whether it was her or the owner at fault not sure).  It is a two unit property..... cash flow keeping current tenants and current terms is around $300/month... with less than $100,000 investment... the dilemmas being

*both units occupied on month to month leases... one has been in place for 4 years, the other 2 years

*One unit is very underutilized as is currently a 1 bed, easily could be converted to 2 or possibly 3

*Rents are a bit low, could be increased easily

My dilemmas..

#1- love that they are occupied on only month to month, meaning instant cash flow without long term commitment to tenants

#2-I think a limited amount of rehab could greatly improve one unit creating a $200-$300 per month rent increase, but would mean current tenant may have to go, which would mean some vacancy

#3- These are two separate units... so 2 of everything that could need work, repair, replacement, etc. 

For the seasoned folks.. inheriting tenants.. how has that gone?  Does the month to month lease make it easier?  Does it make more sense to just leave as is and start cashflowing vs. improving property for higher rent?

What would you more seasoned investors do?

@Robert Herrera  Any chance you are willing to share numbers?  Or what market and what price of homes?  I just don't see that as plausible in my market, but was curious if it is just my market and this is very doable elsewhere?

@Joe Villeneuve I agree, but is it safe to say all are equally important? Which is harder to find? 

Good day all BP'ers. In having a discussion with a seasoned RE Investor this past week and picking his brain on the structure of his business I really deduced his success down to three main relationships:

#1- He has a realtor/partner(he has skin in the game) who handles buying and selling, along with finding deals.

#2- He has a "money guy" who provides him a line of credit. Interesting structure to this one, with a pretty low interest rate, but "money guy" also gets a small % of each profit of every deal, but only if there is profit, so if a deal goes south, only interest.

#3- Has an attorney/inside man(my words, not his) that is ultra connected to distressed deals and seems to get them to the table on these deals before most others even know about them.

My question to the seasoned real estate investors out there, which relationship do YOU HAVE in your business that is most important?  

Good day all BP'ers.  In having a discussion with a seasoned RE Investor this past week and picking his brain on the structure of his business I really deduced his success down to three main relationships:

#1- He has a realtor/partner(he has skin in the game) who handles buying and selling, along with finding deals.

#2- He has a "money guy" who provides him a line of credit.  Interesting structure to this one, with a pretty low interest rate, but "money guy" also gets a small % of each profit of every deal, but only if there is profit, so if a deal goes south, only interest.

#3- Has an attorney/inside man(my words, not his) that is ultra connected to distressed deals and seems to get them to the table on these deals before most others even know about them.

My question to the seasoned real estate investors out there, which relationship do YOU HAVE in your business that is most important?