All Forum Posts by: Jeff Lezark

Both options have their own pluses and minuses and it really depends on what you want to be: a flipper or landlord? These are not mutually exclusive so I'd say keep your eyes open for both.

As far as using cash to buy then refi out later, again it depends on your intentions with the property. Many private real estate lenders (not necessarily 'Hard Money Lenders or HMLs) will cash you out at 65% of the purchase price the day after closing or close/fund your deal up to 80% of the purchase price and rehab costs. This leverage will allow you to do 3-5 deals simultaneously with your existing cash. On the other hand, cash is a lender's biggest competitor for a reason - it's the least expensive way to do a deal. Until you factor in opportunity costs as you'd have to pass on potentially great deals because you've tied up your cash in 1 deal.

 Excellent advice as living in the home will accomplish your shelter goal and not put time pressure on you to sell right away. You're in a good market so taking your time on this first flip will pay dividends down the road. I do appreciate your time in the framing business but flipping is about the way the home appeals to the market externally, not how well the studs are set. Knowing what finishes make a house "Pop" is an art unto itself and well worth learning.

Welcome Chaim!

I don't want to be a negative Nelly but unless you have an extraordinary relationship with your local bank you're most likely going to have a difficult time getting this financed under your terms. Put yourself in a bank's shoes for a minute. You buy this for $2.5m and want them to give you $2m of that. They of course will want to underwrite your ability to repay the loan since you'll be giving a personal guarantee for the funds. When banks underwrite they look for credit profile, income and assets. They also want your cash in the investment because of the comfort it gives them knowing you have that much at stake. If you walk in with a 20% 2nd mortgage for the down payment you've taken away that comfort and they'll most likely reject the request out of hand because, outside of a foreclosure on your credit, you have nothing to lose if the market turns sour and you walk away. I know this isn't what you want to hear but it's reality. 

I'm not an attorney and have -0- knowledge of California's real estate laws. Plus I'm offering free advice which may indeed be worthless for your situation. My gut feeling here is that you are not engaging in the practice of negotiating for the buyer nor assisting the seller in marketing the property. It sounds like you're doing the legwork in finding properties and then turning that information over to your dad. If it works out, he pays you a finder fee. If not, keep looking. You should not need to be licensed since you have no involvement with the principals in putting the deals together. Please ask an attorney either here or buy an hour from your local guy

The network @Jacques Wurms suggested at Denny's is much smaller and more intimate than the monthly BREIA meeting. Very casual but compact so networking is made easy for all. I've not been to the ABC event but I'm told it's very similar to Denny's. Typically 40 or so attend regularly. 

Hi Cat

Our focus is private real estate lending to investors only so we have a pretty good handle on getting deals done. PM me if you want details.

 @Jay Hinrich has just given you the best advice you'll get on this site. Unless you're bringing an exceptional deal to the table lenders want experience, cash assets, income and credit. This does not go for ALL lenders but is typical of what you'll find out there.

Outstanding post, Steve. I'm certain you'll be successful with your realistic strategy and motivation. I'm more than happy to give you advice and education on the financing part of the equation. Welcome to BP!

You may want to consider institutional private real estate lenders such as the one's that advertise here on BP. We focus on real estate investor lending and do not participate in the owner occupied market. This is important to you because it means we have flexibility and an understanding of what you're trying to achieve. I'll be glad to give you details if you PM.