PML Investment Deal in Oklahoma

[Lorilee Lucas]

Investment Info:

Single-family residence private money loan investment.

Purchase price: $75,000
Cash invested: $111,800

I am the PML on this deal. Borrower plans to rehab and STR.

What made you interested in investing in this type of deal?

I wanted to start out in REI as a PML so I could make money while learning from other's "mistakes". I have learned a lot about the big picture process and some of the hic-cups in rehabbing.

How did you find this deal and how did you negotiate it?

The borrower pitched for PML to my network and I was actively looking to fund something. I had run deal analysis on over 60 deals before finding this one.

How did you finance this deal?

Self Directed IRA with Quest Trust Company

How did you add value to the deal?

Allowing borrower to capitalize the loan and pay 1/2 the points and all interest on the back end plus building in an extension if needed (she will use it due to contractor delays and unexpected knob/tube wiring issues)

What was the outcome?

Still pending. Loan is supposed to come due 3/22/22 but I suspect she will need to exercise the 3 month option. The home is still gutted and wiring was just completed this week. Drywall, paint and all build outs/cabinets etc and finishing still needs to happen

Lessons learned? Challenges?

My biggest challenge was managing the rehab draws. I didn't have a good process for this and had so many receipts dropped in my lap to sort through and make sense of. Through this process I discovered that the borrower was planning on doing the work herself and didn't tell me this (I was presented bids) so I now know what questions to ask here and I built out a tool to require of borrowers for updates that puts the work on them and not me.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

no