All Forum Posts by: Rob Beeman

How do I give my ID a picture? I see the "Upload Picture" icon on the Dashboard, but it seems that is for creating a picture gallery. What am I missing?

With the current credit crunch money is scarce, even hard money, and it can be expensive. What I have done in the past is work a number (total cost for the use of the money) into the deal that will make the deal work. Example: If you can sell the property for 150K with costs to get it sold of 15K (commissions, closing fees), spend 100K buying and repairing and holding costs, this leaves a pre-tax net of around 35K (150 - 15 - 100 = 35). From that net number, calculate what you feel you would like to net after the costs of using the money. If your desired net is 20K, then you can not spend more than 15k for the use of the money. If you had the use of the money for a full year then the return to the money source would be a 15% return. Basically you are working the deal backwards to see what makes sense for you as a net on the deal, and then decide if this will allow a good enough return to satisfy the money source. It needs to be a win-win situation for both you and the money source, this way both parties feel good about the deal, want to get it done, and want to do more. Hope this helps.

Rob Beeman
Grindstone Financial
Hard Money Mortgages

Great feedback! Like any investing, there is a risk, however unlike some other forms of investing, you are able to limit some of those risks by doing your homework. While the returns have the potential to be good, and sometimes great, there exists the potential for loss, maybe major loss, if the deal goes sour. I have been a Private Lender at times, used Private Lenders at times and brokered other peoples money for Private Lending as well. My take on it - research it thoroughly, try to leverage your money in the smartest way possible with the greatest chance for highest return, lowest risk and move slowly, only when comfortable. In other words, get others involved (mortgage broker that has contacts for people seeking the funding and attorney to draft docs and oversee the deal, including any escrowed funds if it is a purchase/rehab deal), get a real time appraisal of current value and after repaired value if being rehabbed, have a neutral 3rd party visit the property on a scheduled basis for inspections, and set a conservative max. LTV (Loan To Value) that you intend to lend on either the current value if no rehab is planned or ARV (After Repaired Value) if a rehab is planned. And of course, make sure that you can live with the worse case scenario, just in case it does not turn out as well as you had hopled.

Oh, forgot part one of you question. My 1st deal - bought it for 17.5k, rehabbed it and sold it for 42K to a very nice retired truck driver and his daughter. It was fun and scary at the same time.

Rob Beeman
Grindstone Financial
Hard Money Mortgages

Amber is correct, the sales contract is assigned to the third party for an assignment fee. Now the new buyer has the rights to that sales contract and should receive a copy of it. It is up to the new buyer to schedule settlement. If for some reason the lending source (if their is one involved) for the new buyer forbids the use of assignments, then you would have to execute a 2nd sales contract between yourself and the new buyer disclosing the price that the buyer is paying you for the property, which will mean 2 closes (settlements) #1 - from the current owner to you, #2 - from you to the end buyer (double closing fees). The benefit with an assignment is only 1 close, you pay no closing fees, and you don't even need money to do the deal (short of a small deposit to tie up the property). The downside to doing a assignment vs. a sales contract with the person buying the property from you is that they realize what you are making on the deal (some people care, some don't).

There are a couple places online that may help you determine what the market is like in a certain area such as:
zillow.com
eappraisal.com
realtor.com

These sites offer options once you key in an address to check out info about the area, demographics, % rental vs homeowners, recent sales, recent listings, etc. Not sure how often material is updated at each site, but you might find them helpful.

Rob Beeman
Grindstone Financial
Hard Money Mortgages

As both an investor and contractor, the only problem I see with partnering up is that all parties have to be disclosed of the costs and profits. Often, the contractor who is not in the position to do the deal on their own thinks that the property owner has deep pockets and earns huge profits. Sometimes true, sometimes not. By doing a partnership deal with the contractor, you may never receive the same pricing from that contractor again on a property that you need repaired that the contractor is not a partner on. I have found that when the contractor begins to realize what can be earned from a deal (if it is a good deal), they have a tendency to increase their prices on future deals. When I have rehabbed with little cash in the past I have negotiated a "Pay you when I sell it, or refi it" payment system with the contractor, giving them a little more than their bid for the waiting period (sort of like interest), rather than taking them on as a partner. Of course you need to have a contractor than sustain the wait period and feel confident that you know what you are doing.