All Forum Posts by: Ben Bakhshi

I am flexible but wanted to put this out there to find out if there were people interested in this type of financing.
That being said, we would prefer this type of lending because it could be faster than bank lending with less hoops to jump through. If we need to pay a higher rate, that would be negotiable.
And as far as a cut of future equity, that could be complicated to work out on paper, but we would be up for it.

Hi all,
We are looking for a financial partner to help us by providing private mortgages on one or more of our free and clear properties. Funds will be used for reinvesting in more rental properties.

We have made 4 purchases in Atlanta GA during Q4 '12, 3 in cash. We are going to be closing on hopefully 2 or 3 more rentals by mid January 2013, all cash.

We are team of 3, father and two sons. Our rental portfolio is currently over 9 homes between CA, NC, and GA. And we are now focusing on the Atlanta. All properties are fully insured and have title insurance. We manage all of the properties in California and Atlanta ourselves.

We buy properties that meet or near the 2% rule, and after reducing 50% of gross rents, we provide + or - 10% returns. We will make payments from the income of the property, and in the case of default, the property is yours (hope that never happens).

Here
930 Buckley Place Snellville, GA
Purchase price was $50,000
Fully rented at $900.
Seeking 60+% LTV @ 10-30 years.
Seeking interest rates lower than 6%.

For example:
$35,000 loaned at 70% LTV 15 year fixed loan at 5%, $277/mo.
$35,000 loaned at 70% LTV 30 year fixed loan at 5% , $188/mo.
Payments would include mortgage and interest. Paid out monthly, quarterly, or yearly.

If we can get a good deal agreed on, we can be in business for multiple properties.
We could even combine multiple homes into one loan package. Either giving the lender security directly onto the properties' title, or to an LLC, whichever is best for the security of the lender.

I don't want to pay down my debts because the leverage helps my investing. Even if I were to take a 15 year loan ( I haven't yet, only 30 yrs so far), when the 15 years was up, I would refinance and get cash out or HELOC it. So long as interest rates are lower than my returns doing real estate, I'll be tapping into my homes value. The problem is in 15 years I might owe a much higher rate.

The forum is pretty hard to navigate, read, and participate in from my mobile browser.
Any plans for a mobile optimized site? Or maybe there exists a URL that is already up and running.

Bump. Anyone know this answer for Georgia?

Bigger Pockets has been around for a while, I'm curious to find out how some of you who purchased at or near peak levels are doing right now.
I ask because I want to make sure that investors of today can learn from lessons from our peers.

Jon Klaus, right, but net operating income is not a standard equation.
I typically look at gross rent Vs purchase price. And then make adjustments based on variables specific to the property. Age, cost to fix up, rented or unrented, etc.
For accounting and financial security, it does make sense to look at 50% as a baseline, and outperforming that as a goal.

Rick B. can you please elaborate on bundling several properties into a single loan package?
We will be in need of capital in the next few months. We have a few homes free-and-clear, and were considering raising equity. But raising debt from the bank would be a better option.

Do the properties need to be owned by an LLC/Corp? If so, is there a time period required by the banks? Is the loan personally guaranteed or only backed by the properties?
Do you have any references for lenders?

Thanks!

Good points all of you, thanks for the clarification J Scott.
I haven't used the same numbers for most of our purchases, but using that broad stroke it would help compare the true value of different purchases we have made and plan to make.
That being said, CAP rates are typically not calculated using the 50% rule. It would be nice if there was a standard.

For now my brother will be managing the property and will be earning his fair share.

BTW, we have also made an offer on a duplex nearby, nearly the same story but the asking price is $50,000. One half is rented for $550, other half is empty. I hope we'll have our offer accepted on that one as well.

If you have about $500,000 in the bank right now then I would say you should be able to earn at least $5,000 a month by the end of the year. With shrewd purchasing and renting, you could pull $8,000 a month.

Your next bet is to get financing. Expect to put 25-30% down per property.

Besides that, you'll want to hook up with an investor or hard money lenders and come up with a winning strategy. You'll need to manage many more properties to earn your $5,000/mo.

If you don't have the cash in the bank, then no, that is not a reasonable goal within 1 year.