All Forum Posts by: Jay Hinrichs

@Account Closed

I had two business partners in my Silverado funding days. One owned a garbage company in Norcal and sold to waste management. The other a serial entrepreneur who ran the largest wine concern in the US and took it public.

One owned everything in cash period and had no debt the serial entrepreneur had all sorts of deals going and believed in debt and financing but that I am sure because of his background running public companies.

In our business we borrowed from banks ( credit facilities) to loan to those that needed MHL's and we made the spread which as you know is pretty nice, but even those facilities required us to have 20% of our own capital in each loan.

So the capital structure of each HML I made was our strip of capital ( cash) at 20% banks at 80% but with the bank never being more than 56% of appraised value. if the loans were higher LTV we needed more cash.

So at the end of the day I think it depends on what your doing how big you are and of course your deal flow..

As I move forward loaning money I require CASH into each deal I do with very few exceptions.

So combination of cash and OPM seems to be the right formula.. Investors and lenders want to deal with those that offer to put their own skin in.. The day of your great idea and deal and our capital is much tougher unless its friends and family

@Matt Mason

Matt I think you have the grasp of turn key.

If you can search my post "turn key demystified" I give chapter and verse of my almost 15 years and over 2,000, HML's made to turn key clients. I too had to weed through some pretty bad actors to find the few good ones that actually give the TK investor half a chance.

And unfortunately I have 1st hand personal knowledge of at least 200 people that failed miserably buying turn key.. They were clients I had to foreclose on when the turn key model did not work the way it was advertised.

And your dead on your in ground Zero for TK companies target marketing.

LA basin is second to no place in the world were the most investors that buy from TK companies come from. SF is in the Top 5 AU CA and NZ and GB follow up the rest.. But your not getting many folks that live in Say KC that buy from a turn key company..the locals just do it themselves Right?

You have many radio shows in LA touting turn key in some form.. I am sure your familiar with them, at one point I have done bizz with each and everyone of these folks clients. Its how it was done Pre 08.

As you know the sentiment here on BP from the Old Guard and heavy contributors is DIY learn here and then go DIY you need no Guru at least that is what I get from being on the site less than a month.

And lest one of the Gurus or turn key guys with less than reputable presences tries to troll here for bizz they are flamed straight away. See the Marquis REalty post.. etc etc.

In your area if your not familiar with FIBI meetings I highly recommend those. "For Investors by Investors" I will be a guest speaker at the April 8th meeting in Manhatton beach.. There is no selling and I pay my own way ( of course not hard to get me out of the Oregon winter to the sunny LA coast for a few days)

@Matt Mason great question. I think a lot of investors like to be in total control of asset IE buy a home themselves and want no other partners. And want it to be were they can drive to it..

Others like to spread their funds over multiple investments.

In the syndication approach its really all about the operator and the asset both are equally important in my mind.

Turn key business is defiantly down in sales volume. At least with the 7 or 8 I do bizz with. Hedges have defiantly impacted a lot of these companies. As well as currency fluctuations

However as long as TK companies can show 8 to 10% returns,, ( in a 1% CD) environment people will continue to buy

If your going turn key just make sure PM is nailed down to a Tee and buy higher end. Thats my opinion. super low end works for those that live and work them, but Turn Key with super low priced rentals is really really tough.. And there is no resale market. these homes are what they are and will be what they are for now and until they are torn down burn down or become just functionally obsolete

there has been a lot of discussion on this subject, I am funding a few fix and flips next week in Chicago I have put in an e mail to my attorney there to see if this is legal in IL. Like it is in CA..

Or if pooling money for a Mortgage needs to be done through a REg D filing anyone one of the 500 series.

Any one have first hand knowledge about this in IL.

And or the states they work in. I do deals in Memphis and my attorney there said they are permissible.

@John Vashon

I owned a MHP in Vancouver WA.. I sold it to Taylor your probably aware of them they are out of SF

They have their agent do the basics they target an area.. there are not that many MHP's to begin with.. public record find the owner. then find the phone number and cold call them.. That's how they got to me. It took a year to put the deal together as they low balled me at first.. I had a small park 45 units but I bought it from the original owner who owned it for 35 years and developed it. It was old but extremely tidy. She was nuts about who she let in there so unlike most B class this one had b and C mobiles but A class tenants.

At the end of the day I think Taylor needed to move some money as they got very aggressive and we finally got a number that we both agreed on.

in our market of PDX.. Many parks have been mothballed and high density SFR's have come in. Some the timing was not right and the person that bought say a 200 space park in 06 and finally got everyone out in 08 was stuck in the mud for 3 or 4 years. But that's another story.

Good luck

@Mark Updegraff

Mark your story is the exact reason I went from one of the top 5 buyers of courthouse step properties in Portland Or. to being a Hard money lender.

last Auction I was at. opening bid 80k 40 year old 3 and 2 rancher. value 180k

15k rehab.. ended up selling at 140ish if memory serves.

The low bid is what brought out all the bidders.

on the West coast ( I know it varies in each market) you need to have Cashiers checks for the amount you want to bid. and you must qualify ( IE present them to the crier before the sale) he or she takes down your name and so on.

31 people qualified on that one house. so at a minimum there was 2.4 million in Cashiers checks chasing one deal that at the end of the day bid so high that if the winner was going to fix and flip a 10k profit would be about it.

It was at that point I decided I would take my marbles and rearrange them and start lending money to those that went to auction. That was 2002.

And it never got better here on the West Coast just way to much money. chasing far to many skinny deals. there are the occasional ones that will make a big hit.. But those are ones that are heavy remodels and value adds. Not just fix and flip and or when the market goes up 10% in 6 months anyone can make money then

@Zach Schwarzmiller

SR-22/G2

I like to fly into the airport and have lunch.. other than that I have looked at financing a few developments and Multi.. Its a very sterio typical dead Timber fishing related town in the Northwest. Other than the metro areas of Seattle and PDX.. most of the Oregon and WA coast has been in a depression state for 20 years or longer. probably when some of you younger guys were just in grade school. caveat Emptor would be the word of the day from my perspective.. And its cheap for a reason. its tweaker ville

@Shariyf Grevious

I paid more than 100k CASH for both of my kids college educations. bill came I paid it. no loans

@Donald Hendricks

Ok I admit I am a total hack at google and the internet I have never seen anything BP on google search. are you saying that since I am posting on this site some of it might come up on google. I thought most people just google the individual.. Like someone might have googled Marquis or me or Googled Rick Clatfetler to see what he was all about. I know I pop up there on google a bunch with all my endeavors past and present.