All Forum Posts by: Matthew Chauncey

Hi David,

"Enough with the background and on to my probably simplistic questions:

Financing Questions
Obviously a bank would not give a standard commercial loan on this project as it is not stabilized.
Financing possibility
a. Commercial Construction Loan - What do you think the chances are of obtaining a construction loan to rehabilitate and stabilize the property. After it is stabilized refinance.
b. Hard Money – Huge risks with this. What happens if you only have 50% rented out after a year? Would it be possible to get a typical commercial loan on the amount owed to the hard money lender? The property would have no problems paying the loan at this occupancy rate and still have 50% for expenses.
c. Any other financing options"

I realize the post was from last year and you probably already invested in the apartment or passed on the deal, but let's look at other financing options.

1. The owner.  The owner may consider taking back a second mortgage on the property.  The owner may also consider a wrap around mortgage allowing you time to stabalize the property.  Once it is stabalized and value is added you may qualify for traditional lending. 

2. Equity partners.  Find others interested in doing the deal and pool your resources together.

I would be interested to see if you did the deal or passed.  I grew up in Macon, Georgia, and spent a lot of time in Warner Robins. 

Matthew

Hello Haim,,

I just read your post about wholesaling, and looked at your profile. I like your goals; they are SMART ( specific, measureable, achievable, realistic, and timely).

I have been reading and studying a lot about wholesaling, and seperating whats real from whats hype from gurus. I see you are in San Fransisco and do deals in Memphis. Do you do them virtually and by phone, or do you look at the properties?

I hope to do my first wholesale deal over the next few months, one obstacle I have is location. Im a visiting professor at a university in South Korea. With technology I am starting to think this is not much of an obstacle at all. What are your thoughts?

How are you coming along with your goals of wholesaling 3-5 properties a month by the end of the year?

Matthew

Thanks for the encouragement. I will spend a significant amount of time reading.

I am new to both the site and to the real estate world. I am considering investing in real estate property within the next year after I take a significant time to try to understand real estate.

Let me introduce my background. I am 27 years old with a BA in economics. I have only $5,000 in debts (all student loans), and about $25,000 in savings. I currently have a positive cash flow of roughly $1,000 per month with my job. One weakness I have to address is a low credit score in the mid 600s; I recently applied for a credit card to try to help build the score. I consider myself to have a decent general knowledge of markets and business, but know very little about real real estate.

I would appreciate if some of you that have experience in real estate could answer a few questions.

1. What type of strategies do you use to control risk? (example, if you have tenants that can't pay, or electrical problems that you didn't foresee that will increase your cost, potential change in tax laws, or any other potential risk..)

2. How do you plan your exits? If you see a piece of property and the numbers look good. What process do you take to determine how you will exit the market?

3. If you had to go back and start again in real estate, what would you focus on most? why?

Any of your comments are welcome.

Like yourself I also have a degree in economics. I am not in real estate yet, but am successful in trading stocks. I owe most of my success in trading to having a very good mentor. I think you are definitely taking the smart route by learning from somebody with more experience than yourself. Keep up the good work. :D