All Forum Posts by: Kevin Davenport

I've never used private money like that because it was too expensive and I could find cheaper money. It sounds like you have a pretty good relationship with your friend and he wants to help so I wouldn't feel bad at least asking him. Most people like that are happy to help others get started.

Have you considered doing some type of short term owner financing agreement? Or a combination of bank financing and owner financing?

I agree, try to connect by getting to know a little about them. What type of work they do, their family, history of the property, etc. Start by just having them show you around the property and let them tell you about it. Just as important though is getting answers to questions investors will ask you about the property. What is the after repair value, what needs to be repaired, what's the estimated repair cost. I usually takes pictures of the front, back, and of each room.

I've always torn off the old layers when I've done new roofs. It might be a little extra cost up front but you potentially avoid problems later.

If you're asking about showing proof of funds to the seller, from my experience it doesn't matter. You can have the funds in a business or personal account. I usually just ask my bank for a proof of funds letter that says I have the funds to purchase the property for x dollars. They can write the letter from me or my LLC.

I usually just transfer funds into my LLC business account to purchase the property but for tax and asset protection be sure to keep things separate.

Greg P. has some great advice. You make your money when you buy so make sure it's a killer deal before buying. Also, make sure you're not over paying for rehab costs. I would also have a backup plan if I couldn't sell. Find out what the market rent would be and make sure the property would cash flow well if you had to account for loan payment, taxes, insurance, maintenance and vacancy rates.