All Forum Posts by: Chris Hicks

Hello everyone! I would like to build custom booking websites for owners of short and mid term rentals or just a website for marketing your properties. I have experience building websites from scratch with Python/JavaScript/HTML/CSS and also with WordPress. Would this be a service anyone would be interested in? What would you as the customer think is a reasonable price for a one time fee plus a monthly subscription fee to maintain/host the site and potentially provide SEO (Search Engine Optimization)? 

Also is there anything else you think would be cool to provide as a service with this business model? Thank you in advance!

@Scott Wolf I was thinking the same thing for the insurance and taxes but I verified the taxes on the county assessor website and the insurance was checked against the packet provided by the broker advertising the portfolio. However, other houses in the area seem to have higher insurance premiums. I figured either the packet has wrong information or the current owner might have some sort of blanket policy that lowers the premium. And the loan I am talking about would be $190,000. I apologize for the confusion, I appreciate you pointing that out.

@Chris Wilson Thank you for you response sir, I misspoke, it would not actually be the real cash flow since it does not include the payment I would be making to the lender, so I guess what I actually meant was that the rental income would be $3200 ($3185) a month with the current tenants and then the yearly taxes, insurance, and msd would be $2523. So, the $38220 in rental income minus $2523 for the insurance, taxes, msd would be $35,697. Giving me an actual cash flow of $35,697/12 = $2975/mo minus whatever I pay the lender monthly (proposed 18% interest per year would be $2850), so only a very small margin left of $125. However, this would only be for the 2 year long loan term, and I do have a W2 that pays me well enough to fund any upgrades or potential repairs, etc. Then, after the 2 years I would refinance, pay the balloon payment, and collect rents while paying a lower blanket mortgage over longer term. 

Thank you for your question, it helped me expose some weaknesses in my thought process.

So what would your assessment be of the plan now? I know you still dont have the entire picture but maybe just initial concerns that pop out to you. What expenses do you think I would be missing besides repairs or vacancies?

Good Afternoon Everyone! 

I have a private lender in mind that I would like to pitch a deal to. I ran all the numbers on the deal and it all looks great. It is a 3 house portfolio for sale with an 18.8% cap rate and cash flows about $3,200/month. I want to ask this potential lender to fund the deal 100% but I am hesitant to ask because I have not invested in real estate before. I know I can handle this though because I live near all 3 houses and can manage them and they are turnkey properties currently being rented out, so I know they do not need any major repairs. With the current rental income and my W2 income, I can afford to pay all my personal expenses, save enough for potential vacancy or repairs, and still offer the lender an interest rate of 18%. I am thinking about pitching the deal to him as a 24 month loan where I pay him 18% interest only payments for 24 months then at the end I would give him a balloon payment of the principle. Thats a 36% return on his investment over two years. The reason I am justifying such a high interest rate is because I do not currently have skin in the game and this is the price I am willing to pay to start my portfolio. It is the only way I can think of to be appealing to a private lender.

Would anyone here advise against this and why? 

@Matthew Crivelli Thank you for your response! Yes I am a new investor (under contract for my first house currently), but I am learning more about how to fund future deals. I have seen a common theme with hard money loans being all about the same rates and usually only up to 80% LTV for a rental property loan. I would like to get in to doing the BRRRR strategy after I get out of the Air Force to help fund more rentals but for now I do not have the time to flip houses myself.

@Rick Stein Thank you for your response as well! I had never thought of that, and actually never knew you can direct your IRA towards investments, but you just made me go down a huge rabbit hole of information regarding this. Thank you!

Good Morning Everyone! I am posting here to find out how any of you have found private lenders. I do not have anyone within my immediate circle that could lend me money for real estate and after joining a lot of groups on Facebook and looking around, it seems like most "private money lenders" on there are scams. Could anyone shed some light on how they obtained financing for their deals or reached out to potential lenders? Thank you in advance!