Today is one of the craziest days of the year....Black Friday. People trample all over each other, wake up at 2 AM, and stand in ridiculous lines to save money on Christmas gifts. I just can't do it. After enjoying a wonderful Thanksgiving dinner with the family, I went through the sales papers to see if there was anything at all worth inconveniencing myself for. Turns out the answer was no. I did go to a couple stores at 8 AM but the 6 AM shoppers had already taken everything - LOL!
So I came back home, turned on the computer and bought a bunch of stuff online. Mission accomplished.
Instead of spending my time on the streets today (and since my hubby is working and daugher is off with her cousins and grandparents at the Cirque de Soleil), I decided to spend some time working on my homework assignment given by our private money mentors. Oh, and on Wednesday I did my first presentation with a close friend of the family (I also consider him a mentor) and he gave me excellent feedback that I will incorporate in the presentation.
Finally, I decided I needed to spend some time working towards growing our buyers list. We need to find more active cash buyers here. I'll be going to the Broward Real Estate Investor meeting this week and I just bought a mailing list of non owner-occupied home owners in my key zip code areas from Listsource.com (people who purchased homes in the last 6 months but are not living in the homes they purchased) and then used Click2mail.com to send off some postcards to these 180 folks. Click2mail.com is very effective and inexpensive. Depending on the results of the mailing, we'll contact these same folks again in early January. We want more buyers to sign up for our mailing list so we can contact them about the deals we're getting.
Showing posts with label private money. Show all posts
Showing posts with label private money. Show all posts
Friday, November 28, 2008
Wednesday, November 19, 2008
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"
(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"
Tuesday, November 18, 2008
Hmm....Self-directed IRAs?
I know I haven't written for nearly a week, but we've been really busy working on closing things with these homes. Will have an update on that very soon.
In the meantime I wanted to just make note of something I'm starting to learn more about which is self-directed IRAs. These IRAs allow you to invest in non-traditional vehicles such as private business investments and real estate. It has some restrictions but so far on the surface it seems like a great opportunity considering how things are going in the market right now. I'll be discussing this more with a company that was recommended by Steve Cook over at flippinghomes.com and also will be chatting with our private money mentors to see what ideas they have on this. It can help us with private investors and can also help for our our own retirement planning. More on this soon as we begin to learn more. Gotta run for now -- tonight is my first mentoring session on private money recruiting.
In the meantime I wanted to just make note of something I'm starting to learn more about which is self-directed IRAs. These IRAs allow you to invest in non-traditional vehicles such as private business investments and real estate. It has some restrictions but so far on the surface it seems like a great opportunity considering how things are going in the market right now. I'll be discussing this more with a company that was recommended by Steve Cook over at flippinghomes.com and also will be chatting with our private money mentors to see what ideas they have on this. It can help us with private investors and can also help for our our own retirement planning. More on this soon as we begin to learn more. Gotta run for now -- tonight is my first mentoring session on private money recruiting.
Wednesday, November 12, 2008
$$The money hunt $$
We've switched gears and focused on finalizing funding to close on these deals. We had a buyer who really wants to the Sunrise property, but his financing source won't close on a property that needs roof work done. Oh well! We've even had realtors calling us trying to show the Sunrise house to their clients too so I really think we can get a retail sale out of that one with VERY little work...just fix the roof and call it a day.
We also have a potential private money lender who is one of my husband's clients. She is reviewing our proposal and wants to have her adviser take a look at it too and will get back to us. Speaking of private money...we've secured a couple mentors (Patrick Riddle and Trevor Mauch) to help us out with these efforts...its a bigger deal now since conventional financing is harder and hard money lenders are very expensive. Plus with the market tanking, people are looking for other ways to generate returns on their money. Anyways, one of our mentors (Patrick) is an expert who has raised $6M in private money for his real estate deals over the past 5 years...and he started when he was a college student! We'll be sure to track our adventures in these efforts as well.
Our free mentoring with The Freedom Equation is over now...it was a pretty good experience. The coach we worked with was definitely knowledgeable, supportive, and responsive. I think mentoring in this business (or any business for that matter) is essential and we're going to continue to seek out mentorship whenever we can.
We also have a potential private money lender who is one of my husband's clients. She is reviewing our proposal and wants to have her adviser take a look at it too and will get back to us. Speaking of private money...we've secured a couple mentors (Patrick Riddle and Trevor Mauch) to help us out with these efforts...its a bigger deal now since conventional financing is harder and hard money lenders are very expensive. Plus with the market tanking, people are looking for other ways to generate returns on their money. Anyways, one of our mentors (Patrick) is an expert who has raised $6M in private money for his real estate deals over the past 5 years...and he started when he was a college student! We'll be sure to track our adventures in these efforts as well.
Our free mentoring with The Freedom Equation is over now...it was a pretty good experience. The coach we worked with was definitely knowledgeable, supportive, and responsive. I think mentoring in this business (or any business for that matter) is essential and we're going to continue to seek out mentorship whenever we can.
Thursday, October 23, 2008
Private money magnets
God is good. Today my husband may have secured our first private money lender. She's actually one of his massage clients and has been looking to invest in real estate. We just worked up a proposal for her to partner with us on the purchase of the Ft. Lauderdale property. It actually is a great property to keep as a rental (Section 8 is paying $1200/mo for a 3 bedroom) and if we can do it through a partnership with a private money lender it will be even sweeter. If we still end up selling it pretty quickly before renting it out (either before or even after the rehab) our investor won't mind anyway since it will be a pretty fast return on investment and then we can use her money again for another deal! It's not set in stone yet, but we'll be reviewing the proposal with her over the next couple days. We basically want to be private money magnets....that will help us do a LOT of great deals.
We're going to make some more offers now. Insanely low offers for $25-30K. We have buyers who are willing to buy rehab properties for $30-50K so if we can snag one we can have an easy flip. Steve over at flippinghomes.com just told us on the forum today that he snagged 3 REOs for 15% of the after repair value. And Steph over in Tampa just got a place for $18K. All I can say is wow.
The phone calls on the properties have been interesting. We have been hearing from a lot of people who want to actually live in the properties (owner occupants) vs. investors. We don't mind selling to owner occupants but we tell them that if we have to do the rehab work the price will obviously be higher when we sell to them.
That's all for now.
We're going to make some more offers now. Insanely low offers for $25-30K. We have buyers who are willing to buy rehab properties for $30-50K so if we can snag one we can have an easy flip. Steve over at flippinghomes.com just told us on the forum today that he snagged 3 REOs for 15% of the after repair value. And Steph over in Tampa just got a place for $18K. All I can say is wow.
The phone calls on the properties have been interesting. We have been hearing from a lot of people who want to actually live in the properties (owner occupants) vs. investors. We don't mind selling to owner occupants but we tell them that if we have to do the rehab work the price will obviously be higher when we sell to them.
That's all for now.
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