All Forum Posts by: Account Closed

You need to add points to the loan to beef up the return. Usually the loan consists of the rate (10-15%) and points (3-6%). The points are independent of the term so in your example if you do the 10% APR for 6 months with 3 points, your net profit for the 6 months would be 8%. You can have points at origination, payoff or both.

I'm sorry, I dont want to be mean, but if you dont understand the basics of an amortized mortgage, you need to do a lot more studying before trying to structure deal. Her $1800/month is not all principal payments. Most of it is interest. It does not reduce the balance owed. To find out how much would be principal, look up a calculator or table. You need to know interest rate and term of loan.

I am one of those people with money to invest in real estate. But no way would I lend money to someone with no experience and coming in with no skin in the game. After all, what have you got to lose? You start a project, something goes wrong and you can just walk away. And I am left holding the bag!

Either you have demonstrated ability to do it successfully many times over or you put up a large chunk of your own cash so YOU take the first loss, not me.

Investing is about balancing risk and reward. Investing with an unknown entity is way too risky.

Now, if you have someone who knows you personally and trusts you and is willing to lend then that may work. But since you are posting here for sources I am assuming that is not available to you.

Make sure you go and see the neighborhood. Go in the day and night time. Look up the crime statistics for the block. While the ROI is okay, the neighborhood sounds questionable.

As an out state investor I get a lot of these in the mail. I just laugh at them. There is no way I am doing business with someone sending me something that looks like its written by a first grader in crayon. But I am just one owner. If it works, it wiorks.

Everything is worth what someone else will pay for it. Thats it. Nothing else matters. Simple scarcity is not enough reason to buy something at over inflated prices. You could have the last house in the city but as an investor it may not make sense and I would not buy it.

It totally depends on your situation. What's your income, expenses, debt? I would pay off debt, keep at least 6 mo living expenses in cash and then consider investing the rest. I believe in diversification across asset classes including stocks, bonds, real estate. But dont rush into anything. Study, learn and then make a decision. Remember, keeping capital safe is half the battle. Zero return is still better than a loss. Take risks that you understand fully.

How long do you intend to hold it? What is the exit strategy? I would not buy into a market like you described. I look for exactly the opposite. Stable jobs, low unemployment and growing population.

I wouldn't use Zillow as the basis for assessing the ARV. You need actual comps for that. Secondly, I dont think any neighborhood in KS with rents of $550 is a decent neighborhood and very unlikely the value is anywhere close to $50K. Have you seen this house and the neighborhood it is in? I personally would not buy anything that rents for less than $700 minimum because a) the hood and b) maintenance costs as a percent of rent would be too high.

There is no magic formula. If there was, he wouldn't sell it to YOU! It's not all or nothing. Socks aepre an asset class. So is RE. Find an asset allocation that you are comfortable with and go with it.