All Forum Posts by: Margo Roberts

Yes, Marcus,

All the above seems correct. I do know of someone who used the FHA to purchase and rents the units out to Vets, ensuring regular rental income. The purchase and rentals have been very successful for him. He just asked for an increase in rents from the VA and got those without question. You just have to meet with the Section 8 inspector to make sure all units are in compliance with their requirements for safety and function ability. FHA loans are a great way to go-just live in one unit for a year, and you do have to pay PMI.

If you want to go the classroom route, I suggest you google MPactWealth and find out where there classes are. This is for private lending, not HMBs, however. They teach best practices within each state and they are the only organization endorsed by the American Accredited Private Lenders. It is great for anyone having money to lend and knowing how to protect yourself and other, also.

Hi Corey,

That is a great topic. I have not fallen victim to a lending scam, but I am amazed about how many loans I have run across that have gone bad and the investors lost money in those. One group of lenders were co-mingling funds from two different asset-based properties, which is illegal. I have seen Predatory Lending where the term is shorter that the work to be done with permits and financing factored in, which allows for lofty loan extensions. I am anxious to hear actual stories, as I am certain there are sadly plenty.

Jose,

I might suggest you start in with wholesaling, as credit is not as much an issue in wholesaling, as it is in qualifying for most loans. One loan you might consider, however, is Transactional Funding (when you are unable to assign a contract.) This is where you have a purchase contract in place for a property and you also have a buyer, for the same property, at a higher price than the purchase. You do not have to qualify for the short term loan, you get 100% financing, and the only requirement is for you to have a buyer in place. It is fairly easy to get a POF letter from lenders for the purchase.

This would be one way to build up a down payment for your buy and holds.

Hi Vicki,

Bless you. You certainly have some challenges in life. That builds character in people, as I am told. I think using the $20 for a rental in Pueblo is a great way to start, providing you get adequate cash flow for your son. Qualifying for a loan these days isn't easy, having gone thru it lately. Also, you can usually only get a loan on a property that is already inhabitable, not one that needs rehab if you go the FHA, conventional route. Otherwise, you will need to go the Hard Money Broker route until repaired and he get refinanced out.

He can also put his money in to a PPM type program and get perhaps 6-10% on his money without having to qualify for a loan. Many investors are looking to do a JV partnership with money partners, but you have to be extra careful to go with an investor and contractor that is really experienced and all the protective legal paperwork written up ahead of time.

Good luck to you. I know you will do the right thing to provide for your son as long as you just keep educating yourself and don't jump in to anything without your own knowledge and using advise of impartial experts.

A Hard Money Loan is considered cash in purchasing a property, Sam. As long as your lender can fund by the Close of Escrow date (extensions are often possible), you can use the HML for your cash.

It looks like you striked a cord with many people, Phillip. I will have to say Jon gave some sage advice and many others echoed that as well. Learn all you can about investing and BP is a tremendous place as well as many other free sites, books, REIA meetings, etc. Do not waste your money on the gurus. You want to be as safe and compliant as possible when investing with others and go into it with eyes wide open. I have seen so many deals go bad even with lenders. You cannot be too careful.

Hi Mark,

Yes, I understand Cleveland has some rough areas. I hope this is a great area of Cleveland and the homes sell fast.

It doesn't sound like enough profit if you split it for the risk of your capital. That being said, I think partnering for your first deal with an experienced rehabber is a good way to go as long as you have full legal protection in place first (with a Real Estate Attorney). In addition, I would want a minimum of 50% of the profit if I am coming in as a money partner.

I guess my exit strategy would largely depend on the area the house is in. I see you are from Dallas, Ari. Is the property in Dallas and a good part of Dallas? Is it more of a rental or ownership area? What are Days on Market for flips? Are you more interested in cash flow or building equity? Has it been an appreciating market in that area and expected to continue?

I agree that you should seek out owner financing because when you get in to the larger $1 mil range, owner financing is much more available, as with hotels and is usually the cheapest for you. Use this for as long as you can get it and for as much as you can. You can also get bridge or gap funding if you do not have enough cash, and also for any repairs or upgrades in order to add value to the property. Since gap funding is pricey, you will want to pay this off as fast as possible. Eventually, you might need to refi out of owner funding, which is possible once you are able to show a history of profit.