All Forum Posts by: Phil Z.

    Hi Larry, unfortunately it's not that simple (or legal) to advertise for private funding.  Advertising for private money falls under Federal and State Securities Regulations.  You will need to register your security offering or file for an exception .. and there will still be significant restrictions. 

    Your easiest way to capital is going to be from a Hard Money Lender.

Find good deals. Set him up for MLS updates with rehab criteria and low list prices. He can ask you to set-up showings on the ones that look interesting.

Being a 6-unit, you're definitely going to want to make sure this property is up to code or you could get hit with a monster expense when the Fire Marshall walks through.  Some signs its not to code would be wood doors to units, fire-rated drywall not installed on basement ceilings, or units without two egresses.  The price isn't that appealing considering what can be purchased in the cities.  Of course you also want to visit the building and zoning departments to confirm legal use (do not go by assessor card).

The numbers are not a random 'what if' example.  Its easy to spend $75k on a 2000+sqft house that needs just about everything (not fire or structural).

Your repair figures are insanely low. Especially to say you couldn't spend $75k+ on a $1.25M rehab or could fully gut a property and rearrange the floor plan for $35k. Unless you are only talking material costs .. here in New England those number are crazy talk. Your $350k rehab here would be in the $125k+ range. A $1.25M ARV rehab you are probably spending $250-300k (these are typically very large colonial properties in CT).

I have flipped plenty of properties and deal with many contractors.  I also associate with a handful of full time investors.  The prices you deal with do not exist around here.

Well if the subject property is in inferior condition, (which investment properties usually are), then 5% off the lowest comp doesn't make much sense. I don't understand why you would use a non-subjective formula instead of an accurate ARV and Repairs calculation.

The percentage off ARV doesn't mean much without knowing the repair costs. I made offers much lower than that when the repairs are extensive. This might work just to see if a property's worth looking into, but to use it as a basis for making an offer is extremely risky. In my opinion it's not worth the risk of losing your shirt by not knowing the actual numbers.

ARV - Repairs Formula:  $200k (arv) - $75k (repairs) - $20k (carrying) - $40k (profit) = $65k (67.5% off)

% Off ARV Formula : $200k (arv) * 50% off = $100k (You would lose your shirt)

I would walk away from any deal requiring the buyer to pay 'Short Sale Negotiation Fees'.  That's the red flag of a real estate hustler.

You don't really negotiate the purchase price in most cases .. you negotiate the As Is Value.

You can make offers and do the short sale.  Or you can list the properties and make ~3.5% each.

    You wont find the balance anywhere without asking the seller.  The original loan is in the land records.  If the loan is within the last 5 years, they probably owe the full amount.

    Either way, it is completely irrelevant to a short sale.  The bank values the property in as is condition, and wants an offer within 90-100%.

    When you hear 'gurus' talking about short sale investing, they are usually also talking about getting a low valuation.

1) The assessed value may be completely irrelevant to actual market value.

2) You can never know for sure where the market will be several years from now.

3) As far as I know, once you have PMI, you can no longer get rid of it.

4) I would expect 25%+ down payment unless you plan to live in the property.

5) How do you plan to have 'even more equity' in a few years?  Payments go almost all to interest for the first half of the loan term.