All Forum Posts by: Hannah Hammond

We live in the Phoenix are too, Queen Creek to be precise. We occasionally do private lending but mostly are investing in RE and Notes. There are cases where using notes can improve the total return.

Very cool, I would like to learn more about that and connect with you. Do you ever go to the AZ real estate investment meetings ?

0 Votes

Originally posted by @Bob E.:

Lansing MI, Milwaukee, Chicago, Indianapolis, and Fort Wayne to name a few. We also have partners in metro Detroit but have not found the right deal yet.

Awesome! Now, do you live in Arizona? I see your website says funding, are you a private/hard money lender?

0 Votes

Originally posted by @Bob E.:

@Hannah Hammond You are welcome. Typical deals for us in the midwest run under 30k all in with a resale of 50k at 9%. With that model you would likely have 7 properties netting around $2700 a month, no debt.

Wow, that's pretty neat. Definitely not a common price here in phoenix/scottsdale. What markets in particular are you talking about ? Also, I don't know how I would manage to undergo remodeling without being in the market, I would have to develop a team in each particular market which may take quite a bit of time.

0 Votes

Originally posted by @Bob E.:

I would buy lower price band houses in decent, not war zone, neighborhoods. Then rehab and sell them with owner financing. The new mortgage payments would easily cover the cost of the loan and leave a healthy margin. Take the margin and either buy more properties cash or pay down the loan faster.

We have had success with this in the midwest. Phoenix is pricy for this method.

Thank you for the advice Bob!

0 Votes

Originally posted by @Joe Villeneuve:

Originally posted by @Steve Vaughan:

10% money would be tough to carry long-term. Best may be a flip, keeping in mind the high sales costs and taxes.

Any chance your lender can lower the rate to say, 8%? Some of us have access to far more at less and still choose to wait. No action is still an option.

Unless it was non lienable. Then 10% is pretty cheap.

May you clarify what you mean by non lienable ? ... Is this similar to, say, a non recourse loan?

0 Votes

@Jay Hinrichs

The private lender is willing to be an equity partner and get a loan on a large commercial deal if the numbers make more sense, but in the case of residential flips then yes, the 200k would be the budget.

Do you have any "auction guys" that you would recommend? I have also heard that bidding on HUD homes can be a great method.

Because I am a realtor and have lived in this market my entire life, I know the neighborhoods like the back of my hand and am very comfortable when it comes to knowing whether or not a property is in a good location.

I know single family is the "easier" route due to selling to Jim and Jane homeowners... but as an engineering major, I love numbers and am extremely confident in research, statistics, and analysis. I prefer dealing with savvy investors 1000 times over Jim and Janes. Being only 19 years old, I am sure that many of the "Big Guys" here in Phoenix who currently dominate the multi-family industry will not likely take me seriously and may take advantage of my clearly novice position in the marketplace (I have met a few of them and have already experienced this). This makes is very difficult to develop that vital solid network or "dream team," for many seasoned investors will not take me seriously due to me being a 19 year old woman. However, I have the confidence in myself and have been successful in all my endeavors, so I may just have jump in(with the correct knowledge and preparation) and be my own leader, with the help of the BP community of course !

1 Vote

Originally posted by @David Dachtera:

Originally posted by @Hannah Hammond:

Originally posted by @Stephen Lofthus:

Is it an annual interest rate of 10%? If you want to start flipping, get J Scott's book "the flipping book", you can get it on amazon or on BP. Best resource I've read on the subject.

Although I have experience in residential construction, you can learn enough about the process through self education. You would have to flip multiple homes to make yourself good profits and pay your APR, but great business for capital.

Multi family is a little bit more complicated than SFR'a but still very doable. Find a 4plex to start and run numbers.

Thank you Stephen! Yes, an annual interest rate of 10%. And I will make sure to read that book right away :)

Actually, you may want to start with a 5-flat or a 6-flat so the financing is based on the property's income, not yours.

David J Dachtera

"Success is not a destination. Failure is not an event. Success is a process, failure is a choice."
- DJ Benedict

David,

Because the financing is private, from a close friend of mine, it wouldn't make a difference to the lender if the money is invested in a residential vs commercial property. However, if I choose the buy and hold route then I will definitely be searching for a 5 unit + for greater cash flow and ability to pay the monthly interest on the private money :)

0 Votes

Originally posted by @Jay Hinrichs:

@Hannah Hammond if your borrowing the money for a buy and hold

your essentially 100% financing with a first at whatever rate and your 200k second at 10% this adds to debt service and as the market has strengthened cash flow may not be very good at all with your blended rate.. you would need to find a really good deal.. ergo the value add play.. 10% money for value add is VERY good.

Thank you for the great information Jay! The Phoenix market is hot right now so deals are harder to find, especially without a large network. Would you recommend beginning with Residential home value add or multi unit/ apartment complex value add?

0 Votes

Originally posted by @Jeff Rabinowitz:

Do not take the money unless you have a place you are comfortable using it, are sure you can cover the repayment, and are comfortable testing your relationship. It isn't just a higher yielding investment that you need. You must be comfortable with the repayment terms. Will your lender expect monthly payments, quarterly, ....? Will they be comfortable with no payments until you complete and sell a project (if you are doing a rehab/flip)? If they want payments will those payments be interest only or will the principal be amortized? If amortized, over how long--how large will your payments be? Make sure any loan you take fits your project and your plans.

Oh and you don't have to take the whole $200K at once. It may be advisable to borrow a smaller sum for a short period to make sure you will like partnering with this lender before making a large commitment. It is often a shame when a close relationship gets strained or worse over business misunderstandings. Make sure you discuss and write down as much of the details and terms as you can to avoid harming the relationship if the business does not go as planned.

Hi Jeff, the loan would be 100% flexible on my terms. My partner prefers monthly interest income only, but would be willing to do an equity share instead in the case of fix and flips. Also, I agree and I was planning on not using the entire 200k at once, it would be wise to test the waters and not risk everything especially as a new investor. Thank you for your advice !

1 Vote

All Forum Posts by: Hannah Hammond

Hannah Hammond has started 10 posts and replied 59 times.

Post: How would you invest 200k of private money at 10% interest?

Post: How would you invest 200k of private money at 10% interest?

Post: How would you invest 200k of private money at 10% interest?

Post: How would you invest 200k of private money at 10% interest?

Post: How would you invest 200k of private money at 10% interest?

Post: How would you invest 200k of private money at 10% interest?

Post: How would you invest 200k of private money at 10% interest?

Post: How would you invest 200k of private money at 10% interest?

Post: How would you invest 200k of private money at 10% interest?

Post: How would you invest 200k of private money at 10% interest?