All Forum Posts by: Derek Dombeck

My favorite location for all things creative is a website called cashflowdepot.com. several of my friends who started our as my educators are featured there. You can really take your education to the next level there.

If you have a local REIA or meetup group in your area, I would start there. It's always nice to get referrals from local experienced investors. BP has a list of HML's on the website as well. They are categorized by state. Keep in mind, they haven't been vetted, so do some research on them first.

As far as documents, you will need a purchase contract for the property you are buying. Also, your entity info, insurance binder, scope of work, contractor bids, pictures, and possibly tax returns. These are the basics. Each lender may have a couple of different requirements depending on their underwriting. 

Those are scammers. Most private money lenders are not going to charge any fees until the actual closing of the loan. You may pay for a title search or an appraisal prior to closing, but that's about it. Hard Money Lending companies may have an application fee or a document processing fee in addition to points and standard closing costs. My company doesn't charge anything up front as we feel like the loan needs to close before we have earned the money.

I can't speak for all lenders, but we don't report to our borrowers personal credit bureaus. Our primary underwriting focus is the asset that we are lending on. 

l would generally say most HML's are similar to us.

Private money is usually easier in your local market and face to face with people. After you are established and have a track record, it gets easier to meet potential investors in forums.

They are very similar. The difference is the CONTROL issue I mentioned before. Subject to gives you more control vs a wrap. That's why I said we can't answer your questions without having more information 

Jayson,

You must know the numbers that work for you BEFORE you offer anything. If you want a certain amount of cash flow, your monthly payment has to be structured accordingly. If the seller cannot agree to that, it's not a deal that is mutually beneficial and you walk away.

The answer is dependent on what you both want the most. For example, do you want more or less control? Do you trust the seller will make payments on the existing debt or do you use a 3rd party servicing company? Are you concerned with his current lender calling the note due on sale? What is the sellers age and if they pass away, will his heirs understand the deal you made? Etc.....

After you get all your questions answered, then you structure the deal accordingly.  We can all give you advice on BP, but we don't know any of these answers and are just guessing about what is best.....

Personally, I like the wrap around mortgage with a 3rd party servicer handling the monthly payments to keep everyone honest. You should have the ability to payoff the 1st position note in the event that they call the note due though. 

I would offer to Master Lease all or some of the properties and put Options in place to purchase the property at increments of time that fit the sellers and reduces their tax burden. If they are happy with how you take care of the properties and pay your lease payments to them over time, it's likely that they will finance all of the sales. It's a win win scenario. You get cash flow and control, and they get cash flow without management along with a scheduled sales plan.

No. Creative deals require both parties benefit from the deal. That scenario is only beneficial to the seller.