All Forum Posts by: David Braut

Thanks yall! Great advice.

I have been approached by a Realtor whom I know fairly well asking for me to do a hard money loan for a client of hers.  Apparently the client is successful and fairly savvy.  He and his wife run some successful str's and need some money to start another one.  

The property location is in a good location.  They want to borrow $150k with my lien in first position.  Property is listed at $380k.  Term 3-5 years.

Can anyone advise me as to terms I should offer (interest rate, points, fees etc) and anything else I should be looking for to make this loan?  Thanks!

Take backup offers. 

Dillon, flipping in this changing market can be tricky as there will likely be more inventory coming on the market soon with sellers willing to negotiate.  Just make sure your projected profits are calculated conservatively and be ready for the property to sit on the market for a much longer time than you might be used to before it sells.  Good luck to you!

Congratulations on your first purchase!  This is really the biggest hurdle that most people never cross so pat yourself on the back for getting into the game!

As long as the property can pay for itself then the loan shouldn't be too much of an issue.  You should of course take into account for vacancies, cap x, and repairs but as long as you do this conservatively then the debt for purchasing these assets is "good debt".  Every one of these assets will add to your ability to take on more "good debt" which will enable you to buy more assets and the cycle continues.  

Try to negotiate a discount in you purchase price whenever you can so that you have "built in equity" in your properties.

And remember that as long as there are tenants that need a place to rent (which covers your mortgage and expenses) then you don't need to worry about what the overall values of real estate are doing.  Just keep collecting rent. :) 

Shulem,

The data you are looking for will be found in an easy to read and official format at BestPlaces dot com.  This is the website that appraisers use and it is contstantly updated.

I have submitted many executed offers to title companies in California with no real estate agent or attorney involved. You got bad information.

BestPlaces dot com will show this data 

There are quite a few strategies to find land buyers.  Here are a couple:

Search for all sold land in your area in the last year (or in the area where you'd like to find buyers).  You should be able to find info on who sold and who bought the property.  If you see a buyer who has bought multiple properties in the last year, it is likely they are an investor/land buyer/builder.  You can then try to find their contact info and reach out to them.

Another way is to post "ghost ads" and or signs advertising land for sale.  Harvest the info of anyone who calls about your ad and explain that the property isn't available anymore but would they like you to contact them when you have another property available etc...  Don't post an ad saying that you're looking for buyers.  Post an actual ad with pics of a hypothetical piece of land and don't list the address (because this is a fake ad with the singular goal of finding buyers)  

Build your database and stay in regular contact with the buyers list.  Good luck.
 

I have one of these in my str and the guests absolutely love it.  I would estimate that it has increased my nightly revenue by around $20,000.  I say go for it!