All Forum Posts by: Adam Black

We are about to junk our old software which was a custom job that sucked. Anybody using something to service their loans with that you like? Would prefere internet based but doesn't have to be.

the 15k is their cash flow and to take care of some old problems. As things get better, this will go down.
10%-20% down isn't an option for low to middle income clients.

I have been asked to be a part of an existing business starting up operations in a new market. Basically they use owner financing as their debt servicer. the model goes as.
Acquire properties in low to middle income areas and rehab at less than 50% ARV.
Take $15,000 out of each property not to exceed 75% ARV
These properties are placed in a commerical line of credit at prime plus 1% on a 6 year ballon with a 7 year extension available.
Seller finance at ARV with 3% down and 9%-11%, 30 Year Am
The goal is to have everything paid in 12 years.
They are 6 years into this with about 450 properties. This is their second cycle. First one paid off huge!!. The current one has had some management issues that has cause it some unstability but it also has 6 years to correct and some liquidity to continue.

What are your thoughts? Why would you do this vs. a rent and hold model? Rents in these areas would net you about $50-$100 more per month but of course you would have maintenance issues.

No, nothing changed, Harrison and I just use a different business model where the original purchase is made using a hard money loan. Then a refi is used for the permenent lending.

Ha, no worries, I believe there is enough for us all. We are like you in that we want to offer a quality product. Zero down is still hard to get the lenders interested in plus once you get to 4, FNAM requires 25% in the deal anyway. Plus they require 6 months PITI in addition to the 25%, another hurdle.

Trying to see what the demand is for turn key properties that require 25% down. I might have a private lender that will lend on deals that have 25% invested and would go beyond the 10 max that FNMA has. Average deal would be $70,000 Appraisal, sell for 75% of that, so buyer would be coming to table with around $14,000. 6%-7% rate on a 30yr fixed note. Most properties rent for $725-$800 so cash flow will be high $200s after all expenses. Property management would be provided by seller with 45 days inspections of property.

This is not an advertisement, I just want to see if this kind of deal appeals to you guys. If it does, I know I can market it elsewhere. Our problem is getting lenders to buy 0 down right now so we are looking for differnet avenues.

I was actually impressed with Stewart. He rocked Cramer.

I have a customer in CA wanting to buy a property in MS using his SEP IRA. Anybody have a good referrel? I know Matt on here specializes in it but I can't get in touch with him.

Lots of variables in your assessments. My first question would be why are you buying a triplex at almost 90% of appraised value?
Second would be what is the income on the property?

Congrats on all your hard work.