All Forum Posts by: Jerry Cima

Just want to get a consensus on how deals are being funded, & which part of the deal? My personal friend will be funding 80% of the cost of my first property. I'll be funding 20% plus any improvements.

Are you guys using conventional loans? Working with friends/relatives? Maybe an investor you recently met? Have you established a syndication? Which portion of the costs are you paying? What about them?

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Originally posted by @Jonathan Toruno:

Was wondering how do I convince anybody to fund my deal as far as what kind of repayment terms do I write in? I have a potential deal here in NC

Are you using them for the down payment, in lieu of a mortgage, or both? I remember learning something to the effect of "if it really is a good deal, you wont need to convince anyone". Make a report with the current price you want to pay, show expenses (capex, vacancies, management, etc), show projected income. Show comps (to prove the projected income in realistic). Derive your cash on cash return and so on. Their are calculators for all of these things. If you want them in lieu of a mortgage, you need to both agree on a duration & rate. Someone will correct me if I'm wrong, but i think 7% is on the low end for interest on a private money loan, 12% is on the high end. Don't be unsure of yourself when speaking to them.

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Originally posted by @John Hickey:

@Jerry Cima we do them in Newburgh every Month or two. I’ve talked with a few people about a northern westchester meetup but we never got too much interest.

The reason behind the Brooklyn meetup it that there a lot of folks in BK that have experience renovating the same type of houses we have.....brick three and four families. So they’ve done it already.

And if the did it more 2-3 years ago they’re probably sitting on a lot of equity.

Brooklyn is where I started out. When I went up to newburgh I went up with about a half dozen Brooklyn investors. And since then a boatload have come up. There are still vacant buildings in newburgh. That’s one of my goals. Have no vacants in newburgh. So this will work toward that end.

But I don’t think westchester has that same thing going with Newburgh. Sure a few people might come from westchester like me...but not too many I think. Def none of my Chappaqua neighbors! At least I don’t think so.

That makes sense to me. When and where do you do the Newburgh meets? I'd be interested in going.

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@Paul J Perez it seems like your biggest issue is finding the right property (getting a deal). You may want to reach out to a RE agent, give them your requirements and see what they can find. Also, you should research a bit on lead generation. Maybe you can do a mailing, post a listing on Craigslist, look on Craigslist for `rooms for rent` find the owner and see if they are interested In selling. Post on FB, etc. Good luck, make sure to post if you find something.

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@Jacob Kline I'd be willing to look at your math if you want. I'm newer to the RE game, but I have a knack for crunching the numbers. I even made my own calculator in excel to derive the cash on cash return. PM me.

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@John Hickey I'm from Putnam County, I'd be interested if you had a meet up in Newburgh, or in Chappaqua (I see that's where you're from). Brooklyn is a bit of a hike.

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An individual just responded to your "i buy houses" mailing & would like to sell to you. You determine it's a great deal & agree to purchase the house. A friend is willing & ready to be your private money lender (instead of a conventional loan). No RE agents were involved. What's next? Here is my understanding of the steps (this is probably a mess) , can someone help fill in the blanks for me?

Although a friend, you should still have a contract with you lender.
IF a RE agent was involved, they would submit a formal offer for you.
Once accepted, you both sign a memorandum of understanding.
A title company arranges a title search, title insurance, & an earnest money deposit to be held in escrow.
You have the home inspected (Septic/Water/Radon if needed).
An appraiser visits the house.
A Building inspector (from town hall) visits the house.
A surveyor visits the house.
If any major issues, the price can be negotiated.
Confirm starting date of your homeowners insurance (you already contacted a company beforehand).
Once finalized you both enter into contract (which is provided by the real estate attorney).
Do the final walk-through.
Closing. Bring a certified check for the down payment.

My questions are 1) Does a memorandum of understanding need to be notarized? 2) Is there a difference in a memorandum of understanding & memorandum of agreement? 3) Does the RE attorney usually pick a title company for you? 4) Who's responsible for contacting the appraiser, surveyor, building department inspector? 5) What documents are signed at closing? 6) What is the exact transfer of money? Investor > escrow > seller & buyer > escrow > seller?

Side note, i fully play to use a RE agent & attorney, just wondering how it works behind the scenes.

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Originally posted by @Jonathan Bombaci:

Hey Jerry you can use the Bigger Pockets Real Estate Network section at the top to find real estate agents that at a minimum know about BP and at the very least created a profile to interact with investors. You can as your basic questions over the phone as a sniff test but I would highly recommend meeting them in person for coffee, lunch, or drinks to probe and see if you think it is going to be a good fit.

I would try to find an agent that is also an investor or at least has some investment experience. They're tough to find but when you find one it will be worth the time you spent looking for them. You should ask them about their investments and see if they know what they're talking about. What criteria do they use when they evaluate deals. If they find a good deal will they send it to their clients or scoop it up for themselves?

Ask them about your financing options and the experiences they've had working with other investors. What do they like/dislike about clients. Just like a job interview, ask them to tell me about the last deal they closed. Ask them to tell you about a deal that almost didn't close, what was the problem and how did they fix it? Can they introduce to you to the other team members you'll need? Why do they recommend the (lawyer, lender, inspector, etc) they recommend.

These types of questions will help you get a look at the agents ethics and practices. Did they do what was in the clients best interest or in their best interest? You'll know which type of agent you want and which type you won't want.

Goodluck! Finding a good agent is worth the hustle but just as @Brian Van Pelt warned. Rockstar agents don't have time to waste so be sure you're ready to go when you find one. Show them that you're committed to buying an investment property by making sure you have a preapproval in hand and have gone and looked at a few open houses. You should know what town you want to buy in or have it narrowed down to a few and be able to explain why those. You should have a preference for a duplex, triplex, or quadplex and be able to explain why. Basically you're expecting the agent to do their homework before showing up, you should do the same.

Thanks @Jonathan Bombaci This is good info. I used that & some info i found on YouTube videos to make a list below. Hopefully other people find it helpful.

Are you a full-time realtor?
How long have you been an agent?
How many properties have you sold? How many of those are rental properties?
How many properties have you sold in ABC Town?
Do you own any rental properties?
On average, how long does it take you to respond to emails? Voice mails?
Can you tell me about a deal that almost didn’t close? What was the problem & how did you fix it?
Do you have referrals?
Do you provide analysis of comps in the area?
Why should I hire you?
Do you have any questions for me?

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@Tony Shiwprashad

So the hard money lender is funding 70% - 80% of the cost? Or are you getting a conventional loan? Care to share the intended purchase price?

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Originally posted by @Brian Van Pelt:

@Jerry Cima

You are asking the wrong questions. or I should say you need to ask better questions of yourself as an investor.

As an Investor
. Am I willing to be upfront and honest with my Realtor.
. Do I recognize that the most valuable commodity a Relalor has is time, and that when they spend it with me, they are depending on me to close on a deal, not any deal, but deals we can both make money ?
. Do I know my numbers ?
. Can I write a one paragraph summary to my Realtor of exactly what I want ?
. Am I capitalized enough to actually make a purchase when my Realtor finds me a property?
. When my Realtor finds me a property that meets or exceeds my numbers will I actually write the offer ?
. When i change my mind as an investor will I communicate whats changed to my Realtor ?
. When I succeed in my acquisition will I recommend my Realtor to others ?
. If my purchase whether a rental or a flip fails in either a small or spectacular fashion will I be honorable enough
to admit I made the decisions and not my Realtor ?

You see it's easy to find a Realtor and you'll know within a week whether they can answer email, chew gum and walk at the same time, the thing investors don't realize is that the god Realtors are also evaluating you at the same time. They are the ones asking YOU the tough questions.

I receive 2 to 3 calls a week from "investors" who are looking for "Rock Star Realtors" to add to their "team". I realize those investors have just attended an "investment seminar". I politely end the conversation and occasionally will call one back 6 to 12 months later to confirm that they are no longer investing in Real Estate, and have decided to put it off "for awhile"

When I do find a Real Investor , they share their witten plan, we visit properties and they write offers.

Guess What ? We both make money.

@Brian Van Pelt

This seems to be a good guide for a buyers agent to screen an inventor/client, but not what I'm looking for. My intentions & integrity as an investor is well known to myself. As are the answers to the questions you posed. I'm not trying to find a rock star agent, just one that will fit what I'm doing properly. I've already received 2 calls today from agents who 1) Don't normally deal with investment properties 2)Don't do much work in the area.

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All Forum Posts by: Jerry Cima

Jerry Cima has started 9 posts and replied 25 times.

Post: Survey - Who's funding your deals?

Post: What kind of terms do I use to convince private lenders?

Post: Newburgh meetup comes to Brooklyn.

Post: Househacking Multi-family Home with VA Loan in NYC

Post: Hesitant on My First Deal

Post: Newburgh meetup comes to Brooklyn.

Post: Steps & documents required to close a RE deal in NY?

Post: Finding & screaning a good buyers agent.

Post: Stuck and I need help

Post: Finding & screaning a good buyers agent.