All Forum Posts by: Adam Schneider

We have a 4/4 at Crab Orchard (Lake Park) and have similar experiences as mentioned above. When it gets to the next school year, I'm going to do one lease with all 4 students joined together so they are all responsible. We found that the NOI has been about 6 to 7% per annum over the last 3 years. Looking back, I'd invest my money elsewhere.

If you are looking for more properties, feel free to attend our Triangle Deal Maker Sessions that I host monthly where wholesalers present discounted properties.

Warm regards, Adam

Rob, 

Thank you for the compliment regarding the wording…there's much that people in the industry take for granted, and I try to remember that we should present the value-add components of our niche of the industry.

Private money lenders want to protect their assets--the biggest fears are some combination of trust in the borrower, worst-case scenario regarding the rehab, and worst case scenario regarding the market. 

I'm looking at a deal where I would be the private money lender right now that is out of my area. I'm concerned because I don't want to have to foreclose and then deal with asset disposition of this particular property. If the same property were in my local market, I'd have no concern about it because I know exactly how I'd move the property. That's with me being in the business. For an investor who isn't in the business, that person REALLY doesn't want to be stuck holding the property.

What are your thoughts?

I hear so many people who are talking with money lenders immediately talk about the interest they are willing to pay. Two things to consider--first, it might be best to start the conversation by asking the lender what type of return the lender is looking for, not what you are willing to pay. The rate might be less than what you planned on offering. Second, a loan isn't just about the interest rate. It's about the terms and the risk. Be prepared to discuss both items. Are you paying interest only, are you paying the interest monthly…are there points, etc. In terms of risk, present what you have done to mitigate (not eliminate) the risk in a quick fashion for cocktail party conversations. It might sound like, "Our lenders always have first position Deed of Trusts, just like a bank has when you get a mortgage for your house. We buy at significant discounts, so there's immediate equity to mitigate the risk of a drop in the market…" Put yourself in the lender's shoes. Are you more concerned about the interest rate, or the risk of losing the money you are investing?

For those in The Triangle (Raleigh Durham), feel free to attend our Triangle Deal Maker Sessions. This is a free event held the first Monday of every month (September 2015 will be the second Monday because of Labor Day). This is a group that gets together to buy and sell discounted properties (residential). Each presented has five minutes to present. Most use powerpoint but that's not required. It's not an auction. Feel free to check out details on FaceBook--type in Deal Maker Sessions. Or, you can contact me directly. There are NO guru's, speakers, or products/services being sold. We have a great mix of attendees in terms of interests and real estate experience, and usually a diverse range of properties being presented.

Thanks for the feedback, Ted!

I'm doing my first transactional funding transaction. I'm the "B" in the A sells to B, B sells to C. C is a cash buyer. It's a large dollar transaction. I believe that I require that C sends funds to the closing attorney 24 hours before the AB transaction so I'm not stuck with a situation where I purchase and C walks at the last second. What else do I need to know or do? Thanks in advance. The buyer is providing a material non-refundable deposit. I don't want to do an assignment on this transaction. Thanks in advance for your insight.

When seller financing, is the seller named as an insured on the buyer's policy?

Hey Caressa,

P I'd replace the word leased with the word loaned. Yes, DT = Deed of Trust.

It's different than a Lease-Option. In a Lease-Option, the person is leasing the property and has an option (a right but not an obligation) to purchase. In this case, the person buys the property, and borrows money as part of the transaction. It's like a traditional real estate transaction where a person puts some money down and takes out a mortgage for the rest.

Sometimes you'll run into a situation where you want to assign a property but the end buyer is tight on cash to cover the purchase, the repairs, and the assignment fee. Consider seller financing some or all of the assignment fee. The more seller financing you provide, the larger an assignment fee you can command. I can hear the naysayers now…default risk, default risk, default risk. Three response thoughts:

1. Have a lien on the property as part of the deal.

2. Do your credit eval like you would with any part of real estate

3. Live life on the edge for once, will ya!!

Here's an example of one I recently did with a buyer who cleans houses for a living, and wanted the property I assigned so her sister's daughter would have a place to live. I had the property under contract for $30K, and wanted to assign it for $15K. She only had enough to cover the $30K plus reserves for the rehab. We agreed to a 12 month note to cover the $15K plus interest, to be paid monthly. I have a DT on the house, and I received two references from her--one of whom happens to randomly be a closing attorney I do business with in the area. She hasn't missed a single payment (so far). 

Your thoughts?

The good news about real estate is that it's never a dull moment. I have four tenants in a 4 bedroom condo. The boyfriend of one of the tenants started a grease fire cooking burgers, and tried to douse it with water in the sink. You know the next chapter in this story...sprinklers went off, etc. It's a 3rd story condo. I'm thinking about laminate flooring for everything but the four bedrooms, and then doing low-grade carpet in the bedrooms. The tenants are college students primarily, and the turnover is annual. (As a side note, the boyfriend totaled the tenant's car the day after he started the fire)....anyway, I'm looking for tips no the reno.  Thanks in advance.