All Forum Posts by: Jonathan Marcus

Just give him the $89k he is asking for and just structure it in a way that works for you.

Let's say you tell him, you will give him the $89k; $69k in cash with him holding $20k amortized for 30 years @ 5% interest with a 5 year balloon payment. Your payment on this will be $107.36 per month.

Or still give him $80k in cash with $9k in owner financing at zero interest payable in 3 years ($250/mo).

Don't lose the deal by negotiating hard on $9k. As you said this will be a long term hold and most likely the value will appreciate in the future.

Knowledge overcomes fear every single time. When you speak to a seller and it shows you know what you're talking about, the question of you being young won't even come up or matter.

If you approach this business from the point of helping people with real estate problems and you put the focus on them (remember it's about them not you) and their problems and how you can help; you will see and experience success.

It doesn't matter if you're young, old, tall, short, male, female or any other labels you can come up with; it is about the people that have real estate problems and they are looking for solutions and they usually don't care from where or whom it comes from.

I think there is a misnomer when it comes to the term No Money Down or Skin in the Game. Most believe No Money Down means the buyer does not put any down payment on a deal which is not the case or shouldn't be the case.

What no money down really means, which I've learned early on in my real estate investment career, is no money (significant amount) comes out of my pocket. But it doesn't mean not putting a down payment on the deal.

Someone commented above, it has to do with deal structure which is absolutely correct. If I find a great deal and put it under contract; then I find a lender who will loan me 70% loan-to-cost and I bring in private money to cover the 30%. In essence, this is a no money down deal for me because the down payment did not come from my pocket but from somebody else.

My skin in this deal is the marketing and effort I put in to find the deal and locking it up. It is the deal the predicates the money/funding.

You can make as many offers as you want on as many properties you like. The key is to make sure you know you're exit strategy.

If you make 10 offers on 10 properties and they all get accepted but your accepted offers are $0.50 on the dollar, you won't have a hard time finding people to partner with you on the deals or even assign the deal to another investor. If you put a deposit on an offer that's accepted but you're unable to close the deal, the seller will take the deposit as liquidated damages. Seller suing you for specific performance to purchase a property hardly ever happens.

With short sales Banks usually don't want to see any contingencies on the contract and they like all cash offers. So if you're going after SS, line up your private money investors first then make as many offers as you like.

Hi Dan,

With all due respect to Brandon, I would suggest put more focus on finding a great deal. From personal experience, every time I found a great deal it's easy to find the money to buy it. It is the deal that will bring the money.

For example you find a 4-plex with 2-beds each unit in Greenville, SC. Median rent in the area is $1k per unit. That's $48k per year GOI. If let's say expenses is 45% of GOI (including 5% to cover reserves & vacancy) this will give you $26,400 NOI ($2,200/month) If you pick it up for 10% CAP, your purchase price is $264k.

If you borrow 20% from a private lender ($52,800) and pay 10% interest/yr that would be $5,280 or $440/month (interest only payments)

The mortgage on $211,200@5% interest 30 yr. is $1,134./month. Your total debt service combined is $1,574. $2,200 - $1,574 = $626 net cash flow; $156.50 profit per unit per month.

If you get a deal under contract similar to this example, it will not be hard to find the money to finance it. Start going out there and looking at properties, calling FSBO, attending your local REIA in addition to working with Realtors.

When you walk in to a bank and say you have a property under contract, you're putting down 20% on a purchase price of $264k. They will leap at the chance to work with you.

Hi Marcus,

I would suggest to put it under contract right away; then wholesale it to a seasoned rehab investor who most likely can rehab it for a lot less than the $70k you're quoted.

You can also contact the owners of the other 4-plexes in the area because since they already own in that part of town, taking on this project may not be a big deal to them.

Additionally, to find seasoned investors (this is how I did it in Northern NJ), attend the sheriff sale in your county. Take note of the buyers/bidders because they are cash buyers. Approach them to see if they're interested in your deal. Great way to start developing a list of real cash buyers if you're focusing on wholesaling.