Strategy for lump sum of money

[John Nicholas]

Good Day BP,

As a newbie just starting out, my first goal I set is get to 2500-3000 a month net income.  I have a lump some of money approx 2-300k to work with and want to come up with a solid low risk plan.  Below are some of the thoughts i am having,  I am just to green to understand the best strategy to reach this goal or if it is possible.  Any feed back would be much appreciated.

1. Purchase single family or multi-family. 

2. Buy fix sell first or buy and hold.

3. Use the money for down payments and finance as many properties as possible or pay cash for a couple of properties.

4. Down payment on a large apartment complex or cash for a smaller apartment complex

Have a great day...

[Jay Hinrichs]

@Account Closed

  John Is the guy Joe pickett was marketing for and made all that fuss here on BP with his mischaracterizations of the transactions and which led to a 285 post debate over on the market place

what John is alluding to.. .is his company buys cheap run down houses... and then according to Joe they flip them to CA investors or other out of state investors and make a nice profit on the flip.. then they sell them for the CA investor ( and I assume JOhn has many in his personal portfolio)  to primarily according to Joe Pickett Hispanic blue collar workers there in San Antonio as fixer uppers.. and major ones at that.. According to Joe they sell them with 5k down and long term owner finance with the CA investor holding the paper... So there is no cap rate.. and this is something that was pointed out to Joe many times it is simply interest income.. and since these CA investors sell the home for a farily hefty margin for what they paid for them they are making a greater return than the coupon interest rate.. so the investors are making interest income not Cap rate because they are note holders not owners.

Now were the debate came in what form others on the forum pointing out that much of this is probably predatory lending and there are dodd frank and safe act issues. Dion Dipoli our resident note expert went to great lengths explaining the short comings of this model and the risk it poss's to the CA investors who unwittingly get caught up in this scheme.

But the short name for this is simply sweat equity owner carrys my vendors in Detroit were doing this way back in 2001  but dodd frank really put the breaks on this model if your going to do it according to the new lending rules for owner occs.

there are exclusions and exceptions but when Joe explained it.. he says the Hispanics are all cash and have no credit thereby they will pay much more for a home than they should. Well as a NMLS mortgage banker like I am.. I am fairly certain you cannot qualify these buyers for owner occ under the new laws.. So the risk to the Note holder is having to give back all monies received and depending on the state there could be treble damages.

Along with the fact they are taking a house they bough that is a wreck  they paid 20k for it in the example Joe gave on line here.. then sold it to some unsuspecting CA person for 50k or so according to Joe.. then sold it on contract without ever touching it ( according to Joe ) to the Hispanic buyer borrower for 79k.. .its one thing to buy low and sell retial once your rehab but to sell a 20k house as is for 79k and never touch it that is were it gets a little dicy according to many who posted.