All Forum Posts by: Oladimeji Sonibare

My pleasure, man. The same Facebook group will help. Make friends and ask people to sit in on their deals. People in the group have regular calls with sellers that you could potentially listen in on. There are also Zoom calls where people practice their underwriting live. You'll see the value in it when you get there, I promise.

Absolutely, man. There are tons of resources. BiggerPockets just released a book written by a man named Pace Morby. He has a free YouTube channel and a Facebook group as well. Just start with taking the content in and then team up with someone actively doing these deals. Spend the first few deals just listening and asking questions. You’ll pick it up in no time.

Hey, @Gregory Crane!

Thanks for reaching out. Short term financing is exactly what it sounds like. There are tons of investors, myself included, that partner with other investors to help fulfill their cash to close requirement with the DSCR lender. These kinds of partnerships can keep your cash out of pocket as low as possible.

I won't pretend that this is super simple, however. The PMP would typically underwrite the deal super aggressively. There would need to be ample meat on the bone to ensure they can recover all of their funds.

Happy to explore this with you further!

Hey @Wayne Brooks! Thanks for the feedback. A "cash at closing scenario" does leave us with more debt than the property is worth. It's actually the point. The extra cash is then reinvested in other properties. Risky? Absolutely But possible. We do it all the time; I'm happy to discuss it with you. Not every title company would be willing to facilitate this kind of transaction - we work with a handful who would. Also, 130% is super aggressive. It would typically be 110-115%.

I actually meant to include a disclaimer about that 2nd position assumption at the end. Thanks for pointing it out. Not every seller is open to it, but tons of sellers are.

Hi, @Anna Kate Kingston!

Thanks for putting yourself out there. Creative financing would likely work best in these kinds of scenarios. One popular solution is something called a "Novation" or "Executory Contract". Here's what happens:

1. The seller gives you power of attorney over property. There's a specific way to do this that would give you permission to market the property on their behalf.

2. You partner up with a capital partner for the rehab. Since this property is likely super unvalued as-is, you can borrow these funds from a private money lender. This lender would secure their loan with the as-is equity in the property. Not with a personal guarantee. If you default, they can always repossess the property and finish the project or sell the property as-is. You'd need to pay for an appraisal to be sure this is possible.

3. Sell the property.

Obviously this is a simplification and there are other nuances to pay close attention to. This is what the gist of this strategy would look like. Happy to answer any follow-up questions!

Hey, @Tommy C.!

I looks like I've missed the deadline on this particular deal but my specialty is short term financing for both acquisition and rehab. I'm happy to step in on any future deals. Kindly let me know!

Hey, @Anthony Power!

We actually just got one under contract. It was brought to us by a wholesaler and we get these requests fairly often. I'd say that the most important thing is to keep it competitive. If you're looking to take on debt as an investor, you'd typically want the terms to be better than you can find on the open market. If the banks are offering 7%, you probably want to be at least 3 percentage points below that.

There is, however, one exception:

If there's an opportunity to make a lot of money in this property due to it's location, etc. If the PITI is still low enough for the property to cash flow significantly (by that investor's standards), you're golden. It's about knowing who you're working with.

Hope this was helpful! Feel free to reach out.

Hey, @Sam Chicquen! I'm also well-versed in creative finance. We just got a deal under contract subject to the existing financing. I've got to say, learning creative financing has been super empowering and I'm happy to pass it on.

Happy to connect with you as well, @Eliott Elias! We're always looking for active wholesalers and investors to work with.

Hey, Darnell! I don't fault you at all for putting yourself out there. It some time and lot of questions that, frankly, aren't as good as yours for me to finally understand creative finance.

To answer your question:

Not necessarily. It may be what the seller is looking to accomplish in this case, but there are tons of other scenarios. Some sellers favor a large downpayment because they're looking to retire and they own the property free and clear. Others are looking to reinvest the funds and they know exactly how much they need. It varies from person to person. My advice would be to dig into their circumstances. Build a little more rapport and figure our exactly what they're looking to achieve. Use this as your negotiating point.

Lastly, here's what we'd typically do:

1. Secure a DSCR loan for 70%.

2. Secure a PML for the 30% gap. This will be a transactional loan.

3. Close (this would be one of those funky double-close events).

4. Have the seller finance the 60% like they'd already planned to.

5. Pay your PML back their 30% plus interest.

Depending on how much interest you pay the transaction lender, you now have cash in your pocket at closing, that you can choose to reinvest in other properties.

Best of luck! Feel free to text me with any other questions:

@Darnell Robinson