Smashing roadblocks

Ok, now that I have time to breathe I wanted to write about what's been going on with the funding for our deals. We've had plenty of roadblocks but through prayer and persistence we've overcome several.


(That pic really cracks me up....anywho....)

Let me just say that excellent personal credit seems pretty useful these days due to the credit crunch and fortunately both my husband and I have FICO scores in the high 700s. After SEVERAL calls to hard money lenders over the past week we finally secured two lenders who will provide 90% of funding for our deals. We also negotiated a 8.99% fixed interest rate on a line of credit with BoA to fund the light rehab work and down payment. We were really fortunate to find a local lender that is charging us only 3 points on the loan...that is NOTHING compared to what others were asking for. The lender is a husband & wife business (for the sake of anonymity let's call them Roger & Paula) and they are super nice folks. I think we'll be doing a lot of business with them (or referring others to them) if they keep giving us financing like this.

What we've found is that the hard money lenders definitely care about credit more than they used to...they also only want to fund 65% of the after repair value (and sometimes only 50%)...they want you to have some skin in the game. The terms, rates, etc. that are advertised on the websites aren't the same as what they are offering in the current market conditions. The key is PERSERVERE...you can't give up. Even if you have to call 15-20 different lenders.

Moving on...the numbers look good for the properties -- IF we rent them they will each cashflow a few hundred a month (even with high interest hard money financing) but I don't suspect we'll be holding onto both of them after the rehab is complete. In fact we met with yet another potential buyer today on the Sunrise property.

So here's the current focus (very near term goals)...

Make Offers
7-10 offers out the door by the end of the weekend. Only low end properties that we can wholesale for $40K or less at this point.

Network
There's a Broward Real Estate Investors meeting the first week in December and I will make arrangements to be there. We definitely want to network and find an investor friendly title company that will do simultaneous closes and some landlord/buy & hold investors.

Private Money Recruiting
* Finish powerpoint pitch for private investors (thanks for the template Pat!) this weekend
* Practice pitch and receive critique from at least 2 people before end of next week
* Set up appointment to give formal pitch to our first potential private investor by Dec 6.

Read / Listen to Audiobooks
* Read "Maximum Achievement" by Brian Tracy in December
* Finish Dr. Creflo A. Dollar's audio book entitled "8 Steps to Create the Life You Want"

Banks and Hurricane Distractions

So our goal for this week was to establish relationships with small local banks and call some hard money lenders (HML). We want to begin making offers on some REO properties this week. We had to rule out many of the banks for various reasons but we have two potentials to work with. We just need to have meetings with the loan officer next week so that's progress. I spoke with two HML as well. They started sounded a little bit like a regular lending institution which was a surprise to me. They wanted 10-25% cash for a down payment and some want proof of X reserve dollars. I suspect they have to be more selective these days....anyways there was one lender that will loan 100% including rehab costs so I think that one may be a winner depending on how things go with the banks.

We also met with a couple real estate agents this week. We're going to focus on recently expired listings, unsold listings with at least 4 months on the market, and listings that include keywords such as: divorce, distressed, HUD, pre-foreclosure, vacant, handyman special, investor.

We were supposed to get our bandit signs out this weekend but we're going to hold off on that. There's a threat of Hurricane Ike - a nasty category 3 storm - and everyone is running around buying up everything at Target, Wal-Mart, Lowes, and Home Depot. I'm thinking its probably not a good time to be putting the signs out. So we'll do that next weekend once the storm has passed and hopefully the storm doesn't impact us much at all!