All Forum Posts by: Account Closed

The biggest downside to lending is to have to foreclose on a property whose value is less than the amount loaned plus expenses. At times foreclosing on a property can give a value greater than the loan plus expenses but most of us don't "loan to own'. All lenders have their means of determining how much to lend, at what interest rate and points on a property. Generally this is based on LTV.

I am a private lender. I do not charge points so do not have that issue. I claim my interest payments as ordinary income. I do not pay FICA. Note: I am note a CPA or attorney. This is just what I do.

As a private investor I often provide proof of funds but only if I have vetted the deal and the borrower. Even in this case I would not provide the actual cash until all paperwork was completed to my satisfaction. eg. signed sales agate, prelim title, insurance, note, mortgage (or trust deed). This might make a double closing impossible. It does work for an investor who will actually buy the property.

Join the CAREIA in Little Rock. You will find helpful and knowledgable people there. If you can get to Hot Springs consider joining our little investor group. Our next meeting is June 18. Go to MeetUp.org for details or PM me. 

The best thing you and your friend can do is to get a good overview of the real estate business. There are many ways to do this but I would suggest reading Brandon Turner's book on Low and No Money Down. The second thing would be to connect with a Real Estate Investment Association in your area. I think you will have a path forward to answer your questions during the above process.

Can't wait for Chapter 2. Hang in there.

Talk to people as suggested by @ Jeff S. The lender has the onus of having to follow rules. You have the onus of finding the property and meeting the lenders terms. Be sure you can meet those terms and it can be a win win.

I am a small HML and only wanted to add to this discussion that on occasion I will load above 65% LTV. I have one borrower I will loan 100%. I have numerous loans with him and he has never let me down. Suspect there are more HML's out their who do the same.

Mack,

Read and drive. I think the hardest part of most of the real estate business is finding motivated sellers. Get on BP and learn through the multiple ways BP offers information. Drive. Cruise the neighborhood and look for properties that look like nobody cares.  There are many marketing techniques as well but for a newbie I  think the above 2 suggestions are a great way to start.

ROI stands for return on investment or R/I. Therefore when your return increases (Cash flow) your ROI goes up. When your investment (cash in) goes up your ROI goes down. That is one of the beauties of OPM. your personal investment (the"I") is down. Thereby increasing the ROI. Make sense?