Just starting out close to Panama City, Florida

Panama City, Florida
Starting Out
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Just starting out close to Panama City, Florida

Bj Meadows
Member since 2024 · 8 posts · 2 votes

Found this site today on a podcast and thought I would give it a try! Been a Special Education teacher for 25 years- trying to retire and have studied real estate investing... realize I cannot do my own flips after buying my forever home after the hurricane... but that is a different story! I am now looking at multiple properties that I am interested in for LTR or STR opportunities. One is a JUMBO that needs a TON of work- and trying to finalize that deal now- I hope. But in the meantime, I thought- why stop at one property? Why not purchase several because each property can pay for itself and I am seeing all of these lenders flooding my Facebook now that I have googled some loan options- and so many offer 100% financing... what am I missing here? If there are 100% loans... why isn't everyone doing this? Are they ALL scams? Can you legitimately purchase multiple properties with this kind of funding during a short period of time? What is the drawback? Also looking to find private lenders who deals in my area- maybe to get a better deal on this JUMBO I am working on. Looking at around 500K for purchase and rehab but the income potential is amazing! Any leads, advice, etc.- highly appreciated!

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Tanner Lewis
Lender · Austin, TX · Member since 2021 · 447 posts · 441 votes
2y
Quote from @Bj Meadows:

Found this site today on a podcast and thought I would give it a try! Been a Special Education teacher for 25 years- trying to retire and have studied real estate investing... realize I cannot do my own flips after buying my forever home after the hurricane... but that is a different story! I am now looking at multiple properties that I am interested in for LTR or STR opportunities. One is a JUMBO that needs a TON of work- and trying to finalize that deal now- I hope. But in the meantime, I thought- why stop at one property? Why not purchase several because each property can pay for itself and I am seeing all of these lenders flooding my Facebook now that I have googled some loan options- and so many offer 100% financing... what am I missing here? If there are 100% loans... why isn't everyone doing this? Are they ALL scams? Can you legitimately purchase multiple properties with this kind of funding during a short period of time? What is the drawback? Also looking to find private lenders who deals in my area- maybe to get a better deal on this JUMBO I am working on. Looking at around 500K for purchase and rehab but the income potential is amazing! Any leads, advice, etc.- highly appreciated!

Some hard money lenders will "offer" 100% financing, but a lot of them are doing a bait and hook strategy and will still be limited to LTV regardless. For hard money lending there are two percentages that limit loan amount: LTC and LTV. LTC is a loan to cost, or your loan to your purchase price + reno. LTV is a loan to value or loan to the after-repair value. In most of these cases, you will be drawn in by 100% financing and be limited to an LTV ratio anyway; you're just stuck with a higher interest rate. Some of these lenders will not acknowledge the LTV limit until you already have the appraisal, and then they cut leverage. Be cautious with these lenders. 

In my opinion, very high leverage is not worth it to investors with high liquidity. These are mainly meant for first-time investors with low reserves, and you end up making a much lower profit margin due to the extremely high interest payments. 
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  • JD Monroe
    Investor · Panama City Beach, FL · Member since 2014 · 129 posts · 51 votes
    2y
    Quote from @Bj Meadows:

    Found this site today on a podcast and thought I would give it a try! Been a Special Education teacher for 25 years- trying to retire and have studied real estate investing... realize I cannot do my own flips after buying my forever home after the hurricane... but that is a different story! I am now looking at multiple properties that I am interested in for LTR or STR opportunities. One is a JUMBO that needs a TON of work- and trying to finalize that deal now- I hope. But in the meantime, I thought- why stop at one property? Why not purchase several because each property can pay for itself and I am seeing all of these lenders flooding my Facebook now that I have googled some loan options- and so many offer 100% financing... what am I missing here? If there are 100% loans... why isn't everyone doing this? Are they ALL scams? Can you legitimately purchase multiple properties with this kind of funding during a short period of time? What is the drawback? Also looking to find private lenders who deals in my area- maybe to get a better deal on this JUMBO I am working on. Looking at around 500K for purchase and rehab but the income potential is amazing! Any leads, advice, etc.- highly appreciated!


     Glad you found the site, a lot of investors start out learning here. We haven't found very many legit 100% financing options especially for someone without experience. There are a few local meetups in the area, I would recommend going to some. They are in PC, PCB, Ft Walton, Niceville, Crestview, and Pensacola. Let me know if you want the details of any of them.

    1Reply
  • Bj Meadows
    OP
    Member since 2024 · 8 posts · 2 votes
    2y

    Yes! Would love info on PC and P C Beach. Thank you!!

    0Reply
  • JD Monroe
    Investor · Panama City Beach, FL · Member since 2014 · 129 posts · 51 votes
    2y
    Quote from @Bj Meadows:

    Yes! Would love info on PC and P C Beach. Thank you!!


     Sent you a DM with the dates and times

    1Reply
  • Tanner Lewis
    Lender · Austin, TX · Member since 2021 · 447 posts · 441 votes
    2y
    Quote from @Bj Meadows:

    Found this site today on a podcast and thought I would give it a try! Been a Special Education teacher for 25 years- trying to retire and have studied real estate investing... realize I cannot do my own flips after buying my forever home after the hurricane... but that is a different story! I am now looking at multiple properties that I am interested in for LTR or STR opportunities. One is a JUMBO that needs a TON of work- and trying to finalize that deal now- I hope. But in the meantime, I thought- why stop at one property? Why not purchase several because each property can pay for itself and I am seeing all of these lenders flooding my Facebook now that I have googled some loan options- and so many offer 100% financing... what am I missing here? If there are 100% loans... why isn't everyone doing this? Are they ALL scams? Can you legitimately purchase multiple properties with this kind of funding during a short period of time? What is the drawback? Also looking to find private lenders who deals in my area- maybe to get a better deal on this JUMBO I am working on. Looking at around 500K for purchase and rehab but the income potential is amazing! Any leads, advice, etc.- highly appreciated!

    Some hard money lenders will "offer" 100% financing, but a lot of them are doing a bait and hook strategy and will still be limited to LTV regardless. For hard money lending there are two percentages that limit loan amount: LTC and LTV. LTC is a loan to cost, or your loan to your purchase price + reno. LTV is a loan to value or loan to the after-repair value. In most of these cases, you will be drawn in by 100% financing and be limited to an LTV ratio anyway; you're just stuck with a higher interest rate. Some of these lenders will not acknowledge the LTV limit until you already have the appraisal, and then they cut leverage. Be cautious with these lenders. 

    In my opinion, very high leverage is not worth it to investors with high liquidity. These are mainly meant for first-time investors with low reserves, and you end up making a much lower profit margin due to the extremely high interest payments. 
    8Reply
  • Yoav GiladBusiness Member
    Lender · Ann Arbor, MI · Member since 2020 · 16 posts · 8 votes
    2y
    Quote from @Tanner Lewis:
    In my opinion, very high leverage is not worth it to investors with high liquidity. These are mainly meant for first-time investors with low reserves, and you end up making a much lower profit margin due to the extremely high interest payments. 

    Agree 100%. However, I think it's worth noting that while the profit margin is lower, your ROI as a percentage, when using Other Peoples' Money (OPM) regardless of whether it's a hard money loan or your parents' trust fund, is higher because your investment is much smaller.

    0Reply
  • Mike Klarman
    Specialist · NJ · Member since 2022 · 1k+ posts · 650 votes
    2y

    BJ, Florida is a more higher end market.  No one will fund you 100% in FLA.  Be very weary of anyone claiming that and then asking you to send application fees and such to them.

    To operate in FLA as a flipper where you are buying distressed at 250k+ you better have 100k - 150k liquidity at all times.

    I am doing a refi for someone on an STR in Miami right now. The house is worth 1.2 Million and it cash flows like a beast but at this price range things get pricey at the closing table and for holding costs. You have to be very liquid.

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