All Forum Posts by: Kwamena Odum

 You bet!  I would suggest private lending then.  Friends, family, etc.  Try to anticipate every possible question they may have when you hit them up for the cash.  People investing thousands of dollars are going to want to see that you have answers, and if not, where to find them.  They are going to be a bit more conservative when it comes to loans for an "unproven" business, for lack of a better word.  What I mean by that is that you're new to this, not that real estate is unproven. :)

Also, I have found in my experience, is that people want to see that you have some skin in the game.  For example, if I hit you up for say $20,000, and I'm putting in nothing, wouldn't you think "Gee, if this fails, he loses nothing and I lose everything"?  It doesn't have to be a lot, but just a good faith showing that you have something to lose as well if a rental goes south.

As for your bad credit, it happens.  No worries at all, but I would do everything you can to get your score up.  Set up bills to be on auto pay.  Have your paycheck direct deposited.  That way you don't have to remember to pay a bill or go to the bank.  I did that a few years ago, and it made a massive difference in my score.

Also, get rid of debt where feasible.  You don't have to be completely debt free, just showing that you're able to pay back debt.  That gives you a lot of leverage in the future.

I know it can be very discouraging at first.  I know it was VERY scary to me, as I emptied my entire retirement 401k savings, and let it all ride on one property.  But if you persevere, and be always willing to learn, it will eventually get easier for you, and you'll start to build real wealth.

Oh, and one last thing:  Save for a rainy day.  A roof will need to be replaced, a water heater will develop leaks.  It happens.  Just make sure you have a few thousand saved up for those eventualities.

Hope that helps Kwame!  If you have any further questions, please feel free to chat me up!

Travis

Hi Kwame,

Quick question: Do you have available funds elsewhere, such as cashing out a 401k, IRA, etc? I cashed out my 401k to buy my first property. That might not work well for your situation, just thought I'd give you some food for thought.

Also, I noticed you said that you have no credit to fall on.  What do you mean by that?  Do you mean you have bad credit/no credit?  I only ask because any financing you'll deal with by a bank will want a good credit score.  Don't want you to get your hopes up and find out you can't do the deal because of a bad/no credit history.

Travis

Welcome ,  Why Baltimore and not closer to home in Frederick ?   That hour plus drive depending on traffic can be a real pain .

Hello everyone, my name is Joe Roberts and I have been lurking around BP for a while.  I find this site extremely helpful so I though it was time to introduce myself.

I am 42 yrs old and a lifelong resident of Maryland who lives in Frederick.  I became interested in RE when I was a young adult and saw that my dad held our landlord in high esteem.  He had 10 properties around Montgomery County and my dad helped maintain them for him.  Around 1999, and after some years as an office worker, I decided to get my RE license and pursue that career.  It worked out good for a while.  I sold RE, purchased my own home, acquired two rentals and did two paint and carpet flips successfully.  I was burning the candle at both ends though, and to be honest, I was not that great of a salesperson either.  So I decided to work for Countrywide Home loans as a mortgage processor, which lasted until 2008.  (I sold my rentals in Aug 2005 -WHEW)

After some time off to obtain a degree in Healthcare, I find myself interested in RE again.  This time however, I am a little wiser about myself and what it takes to succeed.  I am also better capitalized for a good foundation.

I've read the books found on 123Flip.com -Ultimate flipping and Estimate Rehab Costs Like a Pro. I've been pouring over Craigslist searching for properties in Baltimore. I also recently passed the RE Salesperson exam and I am looking for an investor friendly broker where I can hang my license. I plan to attend 3 REIA meetings like everyone suggests to do. I am also hoping to connect with some locals in Baltimore who will help me stay out of the quicksand. My immediate goal is to purchase two, maybe three, rentals that cash flow and then perhaps do some flips and repeat the process.

I truly look forward to getting down to business and meeting some of you at the meetups and such.

PS:  I could not get my profile photo to upload

@Kwamena Odum I would recommend a similiar tactic. Go and after Introducing yourself to others ask them if you can run a new deal by them for their input. Present your deal to everybody that will listen. Gauge potential participation from others by the questions they ask and interest they may show. If there is genuine interest (dollar signs will replace the pupils) then proceed to ask if they know of any Investors who may want to participate. If you get no interest then you may not have such a killer deal but all good deals attract money. IMHO, Persevere.

I have done a few deals with private lenders.  To clarify, not companies that lend money to investors, but individuals who has money sitting in bonds or in cd's.  Two of the ways I have done this is:

#1 just get a loan, securities the debt with the property.  If your PML has his money in CD's or corporate bonds they will be pretty happy with 4 or 5%.  We do 30 year ams with a 10 year fixed rate.  After all they were only getting 1-2% in the investment they were in, and they still have the debt securitized with an asset.

#2 offer to do a JV with the money guy. PML puts up 80-100% of the money, you put up the rest and all the labor to locate the deal, fix it up, lease it, and manage the property. This is not a loan. You split the cash flow and equity with the PML either equally or in relation to the percentage invested.