All Forum Posts by: Bryan C.

I am wanting to start Private Lending and wanted to get feedback and tips on how to get started?

I am looking for 8-12% ROI ...seems to be high expectations from what I keep hearing...

Also looking and able to extend $30-$75k in private lending to an real estate investor or flipper.

How would I get started?  What are some things I should need or know?  

Thanks...i will add more details later but currently mortgage payments on 3 properties adds to $3950/mo  (15 yr @ 4%) with 13 yrs left.

Refinancing isnt something i want to do because i refinanced from 30 yr @ higher rates to 15 yr @ lower interest rate.  Its an option but not my top choice.

I think that leveraging might be the best option...possibly sell 1 or more of them and use the $$$ to buy a duplex or 4plex @ a much better CAP rate.

Should I keep my rentals w/ mortgages or sell them and reinvest $$$ on cheaper rentals w/ no mortgage.

I own 3 rental properties w/ 3 mortgages....

I am trying to figure out if it is better to keep my 3 properties or sell and invest the proceeds into cheaper rentals.  I have a mortgage w/ each property and selling them will pay off all mortgages and bring in $100k+ to reinvest.

I currently have 13 yrs left on mortgages @ 4% fixed rates

Income:

3 current properties income = $5300/mo

Expenses:

PITI = $3960/mo (principle paydown = $2100/mo)

Prop Management = $530/mo

Repairs = $530/mo

Vacancy = $530/mo

Total expenses = $5550/mo

NOI:

($250)/mo   or ($3k)/yr

That means I pay $250/mo out of pocket but I get $2100/mo in principle paydown...

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If I sold the 3 properties I would have $100k after all closing costs etc to reinvest into real estate.  I can get 3 cheap rentals @ $33k/each - rents $800/mo each.

Income:  3 new properties x $800/mo = $2400/mo

Expenses:  

Taxes = $300/mo

Insurance = $200/mo

Prop Management = $250/mo

Vacancy = $250/mo

Repairs = $250/mo

Total expenses = $1250/mo 

NOI = $1150/mo or $13.8k/yr

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Todays value of 3 current properties = $550k - $575k

Mortgage balance for 3 properties = $410k

Estimated value after 13 yrs = $650-$670k

Subtract $40k ($3k/yr x 13 yrs) for out of pocket expenses = $610k-$630k

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3 New rentals estimated value after 13 yrs = $60k x 3 = $180k

NOI $13.8k/yr x 13 yrs = $180k

I didnt factor in that I can use the NOI from the rentals to reinvest and purchase 1 additional rental every 2 yrs @ $27k w/ rent @ $700/mo ($350/mo addition NOI)

It appears to be better to keep the 3 properties and just deal with having 3 mortgages until they are paid off.  I would like to get everyone's input here, because I think that I am missing some info on the new rental side to properly compare the 2 options.

Please provide feedback and point out where I am off.... 

Thanks.  So doesn't a quitclaim deed mean that there may be some issues outstanding on the property (liens etc)?

I have 1 home in the FL panhandle and insurance is crazy expensive.....

I had to get wind mitigation inspection even though one had just been done within the last year...and then 3 yrs later they wanted me to do another wind mitigation inspection.

Those aren't free by the way! lol

Flood insurance is paid annually and I think goes through FEMA...cant remember.

Thanks for the update.  That's kind of what I have been hearing about auction.com

I appreciate the info on the title insurance @ quitclaim deed....I personally like to stay away from the quitclaim deeds because I have little knowledge on them.

Ever bought properties @ the courthouse steps?  What kind of research and due diligence to you do as prep?  Thanks.

@Joshua D. ...no disrespect but even if we are brothers, your answer still doesnt answer my question about the paperwork piece.  I get what ur saying but since its the first time he is lending out money and i am borrowing from him I would probably say its best to cover both of us.  Maybe 2nd time we do the handshake or fist bump

no collateral...where can i get a template?

My brother is loaning me $$$ and we want to protect both parties.

Anyone out there purchased any property through Auction.com?  Please tell me your story...I am interested to see if there are deals out there.  Would like to know some tips on what to look for and what to keep an eye out for?