All Forum Posts by: Ronny Crawford

Rick, thanks for the insight. I agree with your assessment and will continue to assess the situation. 

Thanks again!

NW Atlanta REI Meet-up

http://www.meetup.com/NW-Atlanta-REI-Meet-Up/event...

We had a big group last month and separated into 3 groups (Buy and Hold, Fix and Flip, and Wholesalers).  

Thanks! Ronny

John, Welcome to BP!

Congrats on the 11 year find... Time to ramp that up a little :)  With that said, I'd love to connect to bounce some ideas around about how you could fund and refund your projects.  I also buy and hold, but I'm now looking to fix and flip to get my funds up again.   We also have a meet up in Kennesaw each month if you'd like to come meet with some like minded peeps.

Ronny

UPDATE:

Here are the details of this potential HML.

Purchased -   $83,000

Rehab -          $90,000

ARV - $250,000

I walked the property, drove the area, and looked up the comps.  This is a solid investment for this guy.

Loan Deal

HML First position is with a private lender - $140,000

Purchased the property with -                        $83,000

Escrow -                                                   $70,000

Rehab estimate -                                    -$90,000

Basically he states he needs an additional $20,000 in order to complete the rehab to meet the ARV of the surrounding comps. He is asking for $20,000 loan at 12% with a balloon payment once the property sells. He is estimating that the property will be complete and ready to sell in 8 weeks (realistic based on where they are at in construction - already demoed and framed).

Pros 

1. Good vibe with this Construction Company Owner with potential to do future JV with.

2. May gain insight to how HML work, would be place on the Deed in second position.

3. ARV is realistic, 1st and 2nd loan combined = $160,000/$250,000 ARV =64%. Remaining funds are coming directly from the Investor.

Cons

1. Only 12% ROI for Second Position Risk

2. Money is tied up for up to 6 months

What are your thoughts on this HML? Is this something you would do, or walk away, and why? Thanks for your input!

 Jeremy, I'm going to meet him at 12:00 est to walk the property and go over the details.  He owns a local construction company here in Atlanta and looks very legit.  I will discuss the loss payee on insurance (good advice, thanks) and look more into the way points work.

I do not know the original price, but he will discuss the rehab and ARV once there.

Is there a way to turn this into a partnership vs. Me being a lender? Could I ask to purchase from him to put myself in first position then JV the rest of the way out and let him factor in his same profit as before and I still take a 12% ROI? Just thinking out loud.

Thanks again

Advice Needed!

I am meeting with a REI that is looking for a $20,000 hard money loan. I have never been a lender before and need some advice. Here are the details:

$20,000 loan with me being placed in second position? How does this work? What do I need to have signed to secure my loan to this investor?

Terms seem reasonable, 12% for 6 months, so I'm going to meet at the property today to see the project that is already under construction.

Any and all advice is greatly appreciated.

Thanks,

Ronny

Anthony,

As a Cash Buyer I am looking for a wholesaler that can understand what I'm looking for and not try to "Over-Sale" the deal. I research every property thoroughly. I run comps, I drive the area, I walk the property and I do the math. If a wholesaler marks up the ARV and marks down the Rehab costs to inflate the Potential Profit too much, or too often, they lose respect points as a good wholesaler. I'd rather see the Real Numbers, or the Worst Case scenario on a potential wholesale deal.

I will buy and flip for a $10,000 - $15,000 ROI. I do not have to see a "Potential Profit" of $50,000 to consider the deal. I prefer accuracy as my time is important.

Feel Free to PM and add me to your buyers list.  Best of luck in your WS to Investor Path.  Keep at it and you will succeed!

Ronny

Candice,

Welcome to BP.  I would be happy to help in any way I can.  For starters, we have a meet-up group this Monday night if you'd like to attend.  In the meantime, feel free to send me a PM and I will share my contact info if you'd like to start bouncing ideas and goals off one another.  My wife is also on BP if you'd like to connect with her. 

Happy Investing,

Ronny

Dawn,

I believe it becomes a matter of preference for each individual.  My wife is more risk adverse and wanted to use the Cash Flow from our first property to pay off the existing mortgage faster.  However, I convinced her to leverage the debt from a refi to look for the next property. Our Net Profit was $19,000 after the refi, but our Cash Flow from property #1 went from $650/m down to $250/m because the mortgage increased from the refi.  I preferred to get our initial investment + $19,000 with less Cash Flow and continue to look for the next deal.

Consider what you would do with 80% Cashed out?  You could look for (2) properties with 20% down each, or possibly (3) depending on your price point.  I think it all comes down to your risk tolerance.

Manolo, thanks for your insight. I think I'll have to consider the option of adding sqft as well. In this property case, there is the option of adding a finished basement.