All Forum Posts by: George Bloom

I was just made aware of this thread today.

Dave Bashir, my email address has always been in my profile and there was nothing preventing you from contacting me anytime. As you know there is always two sides to every story. If you wish to learn the facts just send me an email and I will respond immediately.

We have developed a private equity facility that discounts seller notes at closing. Up to 85% of face value available. Accepting most credit buyers. This may be a solution for you.

Andrew:

I would not give away 50% to a private money source. You are going to do all the work from start to finish. I would look at a good seasoned hard money lender who will give you 100% of the cost plus rehab expense. Sure the hard money lender will be expensive, 2-5 points plus an average of 14% interest on the loan. But don't forget that is interest per annum billed monthly as an interest only payment most always. If you turn the deal just right and flip it in nintey to a hundred twenty days you should be able to make a hefty profit based on the numbers you described, and you keep it all.

I think the most crucial part of doing these types of rehab and flip deals is to make certain that you are on very solid ground in your market value assumptions and also do a very tight estimate of the rehab costs.

Some of the rehabbers we work with spend most of their time concentrating on these two areas and making sure that they have a good exit strategy.

If you are comfortable with your assumptions you will make more money with a hard money lender than with private capital.

Good relationships with smart realtors is the best way to go.

Maybe I am missing the point but all this agitation about buying vs. not buying your materials leaves me confused.

When we a rehab deal and hire a good reputable contractor we enter into a written agreement as to what the rehab cost will be. The contractor provides us with his cost estimates and we review them and perhaps negotiate them a bit, but in the end we agree to a fixed cost for the rehab.

I could care less where the contractor buys the materials and I certainly don't want to be involved in that process. Our contract is clear and simple, the contractor has to bring in the rehab at the agreed to price. The contractor is granted drawing rights at various stages of completion and he either performs or not. Incidentally we also throw in a clause that diminishes the rehab price by a certain percentage for each week that they go past the agreed to finish date.

So what is the big deal.

Hello:
My experience in the current market is that there are definitely hard money lenders who meet your specifications, you just simply have to search them out.

Glen:
Most likely that if a HML foreclosed on a property, they will want to bring that property up to spec and try to realize the ARV for themselves. They would not be motivated to just dump it.

Any good seasoned hard money lender can arrange to give you a POF letter to satisfy a bank or seller. That should not be a problem.

Anthony:

I know someone who is working on rehabs in Indiana and is looking for lease option buyers who can qualify for FHA after the first three months of occupancy. Let me know if you are interested.

George

Hi:
Before you find yourself deep in the woods, if I were you I would not even consider venturing forth like this. If you are going to go for distressed deep discount real estate, then rehab and possibly hold or maybe flip, well you need to sit back a bit and achieve a couple of things.

Number one, you need a plan. It sounds like you have amassed some information, just enough to hurt yourself with. Seriously, get hooked up with either a good rehab group or mentor and ride along for a few deals till you get the lay of the land.

Believe me, there is a lot that you need to learn before you fly out of the nest. Best of good luck.