All Forum Posts by: Paul Tomlinson

I have to jump in here. I am a real estate investor who uses private lenders. A great win-win situation. I've worked with 3 private lenders in the past and continue to work with 2. My typical terms are 10-12%. Yes, private lenders differ from hard money lenders. I do not pay points.... so I do not work with hard money lenders. The folks I deal with are individuals who are using either tied up CD money or are moving money from an IRA to a self directed IRA.

I changed things around a little at the request of my last private lender. He gave money for the purchase and I paid for the rehab. I gave him 20% of the profit per our agreement. The deal worked out very well for him and my partner and I. We will be closing on a property on Friday with this same private lender.

I'm always looking for additional private lenders because you never know when one might buy a full dressed Harley and decide not to lend any longer. I attract my private lenders through my website, marketing, and word of mouth. My partner and I sit down with a potential private lender (usually at a restaurant over a beer) and show them before and after pictures, numbers (purchase price, rehab amount, and sales price), discuss days on market, as well as how we market our properties. All in all a professional meeting. I also have a powerpoint spreadsheet setup in case folks request info through my website.
If the individual shows interest in what we do, we point them towards the next property that we will be putting an offer on, again go over the numbers, and then ask if they want in.

From there, its simple. No points, no application fee, no credit check, no draws, no inspections, no 101 pages of documents. We tell our potential private lenders that they must be able to close within 3-5 days, although even when pushing banks at this time, we are usually closer to a 2 week close.

Thank you for your wisdom my friend.

Thanks Dick. I know your reply had a little bit of humor in it but you told me what I needed to know. I'm not a sue happy person but I don't care for someone advertising something that I own (when I'm offering a realistically good deal) when I see it going for $10,000 more than what I was selling it to him and the property does need a slight amount of work. The reason for my great price was because I ran the numbers and want to make it a win-win for buyer-seller.
His option was a win for him and not much win for the buyer.

I've just run into a situation where a home that I own is being advertised via Craigslist by another individual. The home is not under contract by this individual, although he asked for a contract over one week ago. He came up with excuses as to why he has not sent the contract back. In the meantime, he is placing a basic ad on Craigslist (ie 2-3 bedroom 1 bath in such and such state) for a price that is $10,000 over what I offered it to him. Although the ad is basic, I was contacted by someone who saw my ad this morning and requested the address and then saw his ad later on in the day and requested the address.... and lo and behold they were the same. I then found out the price that he was asking for the property and the name of the gentleman (I'm being too kind) that was advertising the property.

When I approached the gentleman through an email telling him to stop advertising my property, he said that he had it under contract. Not true. I have not signed anything and have not received a returned contract from him. I understand that if a contract is signed (and or assigns) that you can assign a contract. However because the contract is not signed, this sure does not seem quite right. What should I do about this?

Sam, any recommendations for the free sites besides Craigslist and Worldslist?

Gar, you are exactly right. I just got off the phone with the recorders office in the state of Ohio and they informed me that in order for the
contract to be binding, legal, and recorded in the state of Ohio, it needs to be notarized both on my end (the seller) and the buyers end.

I am in the process of having a contract signed on a
property that I own via a land contract (land purchase contract). The document that I am using requests the
authenticity of signatures through a notary. At what point
does the notary become involved and on who's end?
I (the seller) and the buyer live in two different states.
Am I right to wait for the signature of the buyer before
I sign (and get it notarized on my end) or do I sign, have
the buyer sign, and have the document notarized on the buyers end?

An alternative is to look into doing lease options on the backend. You call the shots in your contract and so long as the tenant/buyer is made aware of the stipulations, you should not have a problem. What I typically do is state that the tenant/buyer is responsible for the first $200 or first $500 of maintenance/repairs in any give month. Of course you can also say that the tenant/buyer is responsible for all repairs. It is their goal and it is my goal for the tenant/buyer to purchase the home withing 1 to 2 years.

Look into finding properties well under value where you can work out a lease option or take over the mortgage subject to (Sub2) its existing financing.
My partner and I see such properties every single day and besides an inspection, title search, and possible appraisal, that would be the only money that we would have out of pocket.

Once you have control of the property, find a tenant/buyer. Get 3-7% or so of option consideration money and charge a premium for rent. Sell the property one year later at a good price for your tenant but where you will make money as well.

I recommend looking at Claude Diamond, John Cash Locke, and William Tingle as inspiration.

Eric, I would try to specialize in one area of REI.
So, if that is lease options or Sub2, read as much
as you can about the subject. Wholesaling is great
if you can find the properties. Get leads coming in,
network with people, clean up credit, get financing
down if need be, and research research research.

Beware of people who will take your money and
not provide a service. Yes, Chris Macone took
$1000 for himself, $500 for his partner, and simply
passed my name along (that is what he called a service)
to supposedly provide two loans. Neither loan was provided
but Chris happily pocketed my money for passing my
name along. Chris Macone/Macone Enterprises refused
to provide a refund. Moral of the story, watch who you
deal with.