All Forum Posts by: Tim Johnson

Welcome to the Tulsa BP community @Rubin Thomas! I have done two deals in Tulsa and Bartlesville and have had great experiences so far. Plenty of opportunities for rentals and flips.

@Chelle Knijnenburg I actually reviewed historical documents in the property's chain of title, which were available online from the county for a small fee. I simply modeled my promissory note and mortgage after those documents, borrowing language from different ones.

@John Thedford @Jay Hinrichs @Rick H. @Al Wilson @Jeff Rabinowitz 

Thanks all of you for your input on this deal last year... it turned out successful! Check out my post: https://www.biggerpockets.com/forums/223/topics/47...

It's in the books!

I posted on BiggerPockets almost a year ago asking for help - should I lend money to two rookie investors who were needing at least $12k to finish renovations on a foreclosure flip... https://www.biggerpockets.com/forums/49/topics/358...

After careful consideration, I ended up lending $15k on the deal at 12% interest and no points. I got security with a first-position lien on their property. Drew up all the documents myself and did manual research on title / taxes... wanted to keep my overhead low!

Everything felt a bit risky, but I was comfortable enough with the investors and the property, and I was covered on security - and it ended up working out nicely! The property sold right at where they originally projected, and I got all of my investment back plus about $1400 of interest profit, with hardly any effort or worry other than the initial effort to sign the deal.

Finished product

Lessons learned:

- They ended up taking a lot longer than expected - so it's a good thing I agreed on giving them a whole year to do it. They were hoping to be on-market within 3 months, and they ended up needing closer to 7. It also took about 2 months to sell. But they got it done.

- Even if trying to be competitive and minimize expenses, at least a small amount of fees/points should be charged to cover miscellaneous items (e.g. I had to FedEx the mortgage release overnight which cost about $30) and getting documents reviewed (if not prepared) by an experienced real estate attorney

- When it's time for the borrowers to sell, make yourself immediately available to the title company. They rarely ever work with private lenders, so communication is key to make sure there are no delays - especially if you're just starting out.

And most importantly...

- Before I scale up and do more deals, I need to spend time learning from professional lenders and experienced lawyers in this field. The lending world is filled with regulations and other potential pitfalls... luckily I didn't run into any significant issues for my first time, but I wouldn't count on it for my second.

Thank you BiggerPockets community for all the resources and discussions that contributed to this successful deal!

@Kim Knaust check this thread for more connections... Deren Huang or Lisa Williams might be familiar with local HML's. Andrea Tapp may have suggestions also.

I purchased my first rental property duplex last year for a house-hack before ever owning my own home. I have since moved to a different city and I continue to be a renter here and plan to be for the foreseeable future unless I decide to do a live-in BRRR.

This has been a pretty easy decision for me.

You have to look at it from an ROI perspective. If you own your own home, then yes you have (perhaps) reduced your total monthly payment, and converted a portion of your monthly payment into building equity (offset by maintenance and other new expenses of homeownership), and you can enjoy some speculative appreciation in property value, BUT you have to invest a significant down payment in order to realize those benefits. So would you rather put $20k down for that, or put $20k down to gain much of that PLUS a 10-15% CASH return (not including equity build)? Also remember that the alternative to both of these is to put $20k down into the stock market or bonds.

So basically you have to compare your potential net savings on total cost of living for owning your home instead of renting, versus the potential net profit of buying a home and renting it out. Then divide that against your required down payment for both, and then compare resulting ROI to the stock market/bonds. Compare all three options to your current state (renting) and decide which one is the best use of your money AND your time.

I found the following calculator to be very useful in making these sorts of judgments.

https://www.nytimes.com/interactive/2014/upshot/bu...

@Joe Ward you might want to follow this thread

I'm a fellow investor new to the game and have two deals in Bartlesville and Tulsa. I've since moved to Houston, TX for work but try to stay active in the Tulsa community.

You might connect with @Kim Knaust and @Andrea Tapp who I know are wholesaling deals in Tulsa, if you are looking to build your network and find potential sources for fix-and-flips that have been pre-vetted.

@Deren Huang and @Lisa Williams are both realtors / investors and have been a helpful resource for me.

@Preston Roach is another new investor in Tulsa / Broken Arrow.

Good luck to you!

What are some examples of HML / private money deals gone bad? What happened?

Were you on the lending side or the borrower side?

I got a 30 year note at 20% down for my duplex rental property. Worked with a regional bank. I had to owner-occupy temporarily to get 20% down, otherwise it would have been 25% down.