All Forum Posts by: Ned Carey

@Kenny Stevenson welcome to BP. Sounds like you have een interested for a long time. Once I got into it I realized I could have started much earlier. Good luck.

@Zachary Wurtz  The basic docs. for a real estate loan are a "promissory note" (often just called the NOTE) and a mortgage. The note is the document that spells out the terms of the  loan; like interest rate, how often pay, how long the term is, etc. The second doc is the Mortgage, or Deed of trust, in some states. This second document is what makes the property security for the loan. This second document is recorded in the land records so the world knows the property has a claim against it. 

A ttiel company will prepare lots of other documents to sign at closing and usually there will be an application and an appraisal. 

In your current situation, it could be covered by a contract of the terms of your agreement but creating an LLC as mentioned is also a good way to handle it. This is not a do it yourself kind of thing you really sould talk to an attorney. You may want to check out soe of the legal self help books by NOLO Press. I don't recomend you do it yourself but reading up on the law will help you better to work with and understand your attorney.

@Hunter Gibson wrote
         "I have bought deals with out any money out of my pocket that cash flow month with cap x. Sometimes when you have been doing something for so long you forget all of the possibilities that are available."

Congratulations Hunter that is awesome. But for those reading along**  Hunter's experience is NOT typical. I would be interested in hearing about your deals that you have done with no money down and how you structured them. 

       "A handful of lenders today and they said after closing they not only do not care if there is a 2nd" 

True but the issue is will they allow a second when you buy the property. Back o the original question assuming the 1st loan will allow a 2nd smaller local banks will be your best bet or a true Private Lender. In other words a friend family or associate that will lend to you because they know and trust you. Also I would ask at your local investor groups as they may have specific experinece with the local lenders. I don't know any banks that do this. 

** (when i respond it is not just for the original poster but others that learn from lurking)

@Gene May Creative financing is a big arena. it can be easier or it can make it more difficult. 

Owner financing for example could make it a lot easier. Generally I see a lot of people here wanting to do 100% financing and that temd to be very rare and hard to do. 

As @Nicholas L. says can you be more specific?

I strongly disagree with @Chris Seveney on this issue. For the 20+ years I have been investing a "private lender" was always a friend, family, or associate that is not a professional lender. They lend to you because they know, trust, and respect you.  Since they are not professionals they may skip some of the hoops any professional lender would want.  Your aunt Sara might be willing to loan to you at 5% becasue she is only getting 4% from her CD for example. They may lend on deals a professional lender would not. 

Hard money lenders are professional lenders. They loan on the "Hard Asset" more than on your personal finances. That is where the term Hard money comes from. 

To me there is a distinct difference between the two. 

@Don Taylor yes. Lenders who call themselves 'Private Lenders" who are actually professional lenders are a dime a dozen. Lots of them here on BP. 

A true "private Lender" as investors think of them are friends family or associates that lend to you becuase they know and trust you. Becasue they are not professional lenders, they may be willing to give favorable terms with fewr hoops to jump through. 

If you want to find them you have to always be on the lookout for them.  Talk about what you do or want to do. People are often intersted in real estate. When your friends ask "what's new" tell them about your real estate ventures.  "I've been looking at some incredible real estate deals. IF I only had the money."  Say that enough times and someone will ask "Well how much would you need?"

@Tiffany McKinney 22 years seems like a Llong time for an IRA investment. For an investment that long I iwould want a better return. Over that period you could do better in the stock market. Most IRA lending tends to be higher rates for much shorter periods.

A good question to ask yourself is; why don't they just get a loan from a more traditional lender? That is about the going rate for investors now. If they can't get a lonf from a traditional profesional lender then why are you lending to them without a premium for the risk? 

@Clayton Silva I hear you. to many investors focus on the cheapest price and ignore the big picture. A great example is people calling around to find the cheapest title company (@Tom Gimer has discussed this) If you are doing a $100-400K transaction why would you try to save a few hundred dollars for good title work or legal advice. 

                                       New Investors Pay Attention

The profit fron real estate comes from doing good solid deals, not by being cheap and cutting corners.

@Hunter Gibson  wrote:
         "If I can get a deal to cash flow on long term rent with no money out of pocket in a great area I will buy that deal every day regardless if I am underwater"

Because you are young, asking the question you are, and that you don't mention specific rental experience in your profile,  I am guessing you are new at holding rentals. 

If you have a property that has net positive cash flow you are probably not under water. But in today's market, with prices at very high levels, it is hard to cash flow at 100% financing. Ther are a LOT of hidden expenses that go into holding rentals that many new investors don't recognise. Management fees, lease up costs, turnover costs vacancy rates, repairs, licenses,  non paying tenants etc. are all examples of these. 

What you say is good and true in theory, However when you run actual numbers many good sounding strategies don't work. I don't say these things to discourage you. I say them so that you can be better prepared to deal with reality. Good luck. 

@Hunter Gibson This will likely be hard to find. aIthough is more likely to happen with a smaller local bank who basses their loans more on the relationship with the borrower. Large national lenders are not likely to do this. 

Banks want you to have "Skin in the game" in other words they want you to have your own money at risk.

That said just because you can do a deal with 100% financing does not mean it is a good deal. A bad deal with 100% financing is still a bad deal. I think this is what @Joe S.  and @Jason Wray were trying to say.