All Forum Posts by: Tyler Rowley

I am looking for creative ideas on possible ways I could acquire this home.

On the market for $2,000,000.

Slightly underpriced, could be worth $2,500,000 with some minor upgrades. 

Would be a great rental property. $100,000 per year in rental income. 

At best I could put 10% down. 

No conventional bank would talk to me about this deal. 

What are some creative ways I could get this property?

thanks.

@Will Fraser: thanks for the reply. I was sort of confused by your juxtaposition of “conventional type of mortgage” and “commercial type of loan from a bank.” I always thought those two things were the same thing. 

It’s good to know that different banks react differently to these types of things. Sounds like you’re saying that some banks are more risk tolerant than others. Is there a list of banks that are more investor-friendly and likely to not “see ghosts” with stuff like this? 

I just watched a RE video by Ken McElroy which I found helpful. I have a question  though. He mentioned raising the down payment for a house from an investor ($22,000 for a $110,000 home). Will a bank allow that? If the money isn’t seasoned for 2-3 months, it is my understanding that the bank won’t accept that as payment for the home. Am I wrong?

I know how to find deals. 

I have lenders lined up to fund deals. 

The thing holding me back is the logistics of going through the process of using a private lender for the first time. I don't want to appear ignorant in any way to a person lending me money, but the truth is that I have never done this before (I have only purchased homes with my own money). 

What exactly should I have in place before I bring a deal to my lender?

What will an agent want to see if I make an offer on a property and tell him I am buying it 'cash' with someone else's money? 

I learn as I go, and I usually have no problem making mistakes, but in a case like this, when I am borrowing money from someone, I don't want to appear sloppy at all. 

I don't know if you would call this analysis paralysis, but it some sort of paralysis. Maybe Ignorance Paralysis. Looking to conquer this fear so I can move forward with confidence. (Thanks in advance for any help people can give.) 

@Kenneth Garrett: Very helpful thanks. Debt Investor vs. Equity Investor. It’s always helpful to know terms. The Equity Investor has to get his investment back, right? Could you walk me through a typical Equity Investor deal where the investor puts up all the money for the purchase and rehab. Thanks. 

@Shiloh Lundahl: very helpful advice about proven success leading to more opportunities. That’s why I bought my first deal by myself, to at least show that I’m in the game and being successful. 

What’s the best place to find private lenders you don’t know personally? 

Do you get better rates with friends? What rates should I expect with private money? 

@Whitney Hutten: Thank you so much for the advice and answers so far. Some more questions:

- Let’s say a private lender gives you $100k for the purchase and rehab at 10% and the projects takes one year. He is owned $110,000. Is the $10,000 interest payment paid back at the end of the deal or is it paid back monthly ($10,000/12)? 

- Let’s say the same private lender wants to be involved in the equity of the deal; he wants to be a 50/50 partner with you once the house is rehabbed and cash-flowing. So he lends the $100,000 at 10%, he gets paid back his $110,000 once the house is rehabbed and refi’ed, and then the two of you split the monthly mortgage, expenses, and cash-flow. Does that sound right? 

@Rick Pozos: Really helpful Rick. Exactly what I was looking for to get the wheels turning and prepared to answer any question. Thanks for taking the time. 

If I were to sit down with a private lender to discuss investing in residential real estate deals with me, what questions should I be prepared to answer? From the basic to the sophisticated, I would like to compile a list. Thanks everyone. 

@Rick Pozos: I would imagine the term limit gives them a sense of security. It’s not they mind getting paid $1100/m, but they’re still concerned about getting their $110,000 back, and a deal that drags on with no exit in sight is likely nerve wracking for the lender.