All Forum Posts by: John Kesner

Zane Bradshaw There a couple ways that you can "prove" it's safer. First off, no one is getting a money back guarantee on their investment if things go bad. Therefore everyone is accepting some risk. If you find a deal that is priced below market value, you have some equity from day 1. That means you can sell it for more than you paid if need be and they could recoup their investment if they had to foreclose on you. Next you cashflow, so the income the property produces (rent) is higher than the all of the bills, so you can build some reserves in case a big expense come along. Then the investor is protected because you have the income to pay the mortgage and maintain the property. Then the most important thing of all: They have to believe you can actually make all this happen and that they will get their money and a return from you. Family is a good place to start, they tend believe in their loved ones

@Zane Bradshaw

Yes, its a sales pitch. Like @Rogelio Rosales said, you want to make an investor (family member or whoever) feel secure and a good sales pitch can do that. It shows you know what your talking about, have thought it through and they have recourse if you don't pay.

The sales pitch could be used to find a co-signer or to find a person that can make the loan themselves. That way you can make the terms of the loan what you want, try to figure out what terms would be able to offer and put it in the sales pitch (maybe slightly better than a bank would offer since you have no credit, or money). 

As far as if you do this just until you have your 2 yr work history is up to you. This is a way to get started. If you can make this work and get a deal done you now have a bit of a track record. If your investor is happy with their return and has more money, maybe you can tap them again on another deal. Or find another investor that would like a similar return. It just depends on your goals. You could use this method over and over and never need work history or a regular bank loan. The more deals you do that work out and give an investor a good return the better your track record becomes and the easier it is to sell other investors on the idea. 

-John

Zane Bradshaw The sample property is just a way to sell your idea. It gives you time to talk to folks and get them on board with your plan. It makes things much easier if you have your family member (private lender) lined up so when you see a great deal you can pounce. For a sample property, I would search and find a real property that meets all your criteria. Crunch the numbers, and make a nice presentation of it. Use the online pictures, show your math, have the link to the listing. So you can convey that you have thought this through and there are actual properties out there that can work. In markets where things move relatively quickly, by the time you find a suitable property, put all this together, present it to your family member, check out your proposal, check with bank to see if they can get the money, have them think it over, the property is sold. Your selling them on the plan, not that specific property. The sample is just proof that there are real properties on the market right now that will work for your plan. I would also find out if you need an attorney to draw up the loan documents and include that in the presentation. Your talking about borrowing a significant amount of money, you want them to feel secure about it. You could probably use the bigger pockets deal analyzer for most of this, it outputs a really nice document that shows all the numbers, you can add pictures, etc...

Edward Perkins Welcome to the neighborhood!! Lots of great folks willing to help out around here. Be sure to check out all the free resources. The podcast is great. -John

Zane Bradshaw You might be able to have a family member co-sign on a loan. Then your name would still be on the title with the family member. Better yet you could just find a good deal that the numbers work (rental income covers all the bills and maybe a little more) and present it to family and friends. Maybe someone you know would want to hold a note. You could always start with a sample property, find one that works and use it as an example. Once you have someone on board, you can get a proof of funds letter for making offers on similar properties.

@Michael Swope

Honestly I do not know much about about the market in South Lake. I know its a really fun place to hang out! It seems to me that in a vacation rental, you might have to make a bit of a comprimise. Close to the Heavenly chair lifts (possibly with a view) or close to the lake, I'm not sure you can get both. The place is a tourist draw summer and winter. Beware tho, there are some pretty tough streets. 

@Darrin Davis

It all depends. The first thing you need to do is get a feel for what homes cost in the area you want to target. Any easy thing to do is find a house in the area you like and call the listing agent. Talk to them about it and then ask them to send you the new listings for the area you want. They use the MLS system and set up the criteria you want (area and price) and the system automatically emails you when something new (or price changes) pops up on the market. Then you will have a steady flow of houses to look at and you will pretty quickly get and idea of what things cost. Then you will start to be able to identify a deal when one comes along. The MLS is pretty hard to find really great deals because TONS of people are looking at it. But it's perfect for learning the market.

Darrin Davis The good news is that to buy houses that need flipped, they rarely will qualify for bank financing. You will need a hard money lender or a loan from friends and family. Neither of which worry much about your credit score. The whole trick to flipping (or any real estate strategy) is finding a deal. Start there, build your team along the way. -John

Eric Smith Any luck with your Craigslist test ads? I always find those fun!

Hi Michael Swope I'm over the hill in Reno. The only thing I know about the SF market is that the prices seem out of sight. One thing I would advise is brushing up on the landlord and tenant laws. CA laws seem to favor the tenant so you need to know what your rights are (or are not) as a landlord. With rent control in many areas and the prices as high as they are, I hear there are many savvy tenants that know the system and how to work it. Just be prepared before jumping in, and avoid a rental nightmare.