All Forum Posts by: Richardd Barran

You can also pick up some properties 'subject to'. Look for expired listings, driving for dollars, water shut-off lists, etc. These leads are popping up more than ever these days. If they have a rate locked in during the 2-3% days, good luck -not- cash flowing lol. 

That being said, do your research. Subject to is preached like crazy but not too many people talk about the "due on sale" clause. 

You (usually) don't find true private money lenders. They find YOU. 

Try partnering with someone in the local REI community in your area with good borrowing power, whether it be from one of their family members writing a check at title, or if they have a solid relationship with a HML. Check the FB groups, make connections, and I'm sure you'll find what you're looking for.

Good luck!

How would you structure a partnership with someone who has the borrowing power, but no capital for a furnished rental? 

Our partner can qualify for a secondary home loan with their w-2 income, but that's all they're bringing to the table. 

We were thinking of giving them an equity position since we would be doing everything else, including using our funds for the downpayment, furnishing, and managing it ourselves. 

Heck no

Unless you’re already a millionaire, 25-30% of your gross is worth a few hours of your time every week, and eventually when your systems get refined, that few hours turns into a few minutes.

Read Avery Carl’s book, watch Robuilt on YouTube and real estate Robinson’s.

If that makes us insane, than color me insane. Normal is boring anyway. That’s why we’re real estate investors

what are the complete numbers? I may be misunderstanding, but it looks like you will have two loans for this asset?.. one for the upfront payment and the rest for the finance. 


is that 200k gross or net?

I agree with @Davis Hardin.

Even if the AirDNA, datarabbu and awning numbers show you nice things, the downpayment to revenue looks like an awful cash on cash return for such high risk. 

Short Term Shop has quality podcasts, tools and education. I will always be grateful for Avery’s book. Her entire team are winners and we can’t wait to work with them  

Real estate Robinson’s. My fiancé loves them. Tony and Sara have an awesome presence and have a newbie friendly vibe… which is GREAT for teaching your new investing fiancé why we need to save up for cabins in Gatlinburg.

robuilt on YouTube is like the Casey neistat of real estate YouTubers. Great content, and super entertaining. But you are rooting more for him and his journey more so than you learning for yourself. 

…. @John Underwood’s post history. This man spits out gold but you need to go through his posts to dig it up. I’ve learned a TON from him 

 That I do not know. I would ask a realtor about this one. And thank you so much! Finishing up flip #2 a the moment, and this one felt like easy mode after the hell we went through with the first one, haha! 

@Nate Sanow No sweat, my friend! 

Regardless of their reasons, thank goodness we are not the giving-up types, haha! This situation makes us better investors in the long run! 

Yeah, I hear you! That is a great question. 

I was not able to able to talk about the full breakdown since there is a character limit, but we dealt with theft, a break-in, and hiring a new contractor. We had a brand new scope of work to fix the illegal work that was done before. We accrued plenty of interest and points we owed our private lender and we had to take out a 15k high-interest credit card to pay for the materials when our money ran out. 

So all in all, our original scope of work was 65k, but it was more like 120k after everything is said and done. 

We spent the majority of the budget with the first contractor and when we found out 20k was stolen from us, our private lender got involved in a possible lawsuit and we fired him immediately. We used the remainder of our private funding to fix the major foundation issues we did not see. As I said, this was our first flip and we were completely unaware of how to inspect the crawlspace or what to look for. 

Our second contractor knew about the first contractor we hired and he had a reputation we did not know about until it was too late. Our second contractor helped us out. We bought the materials with a credit card and he was not going to charge us for the labor until we sold the property. He didn't even put a lien on the house, even though we encouraged him to do so. He felt us out and went with his gut with us. 

There were also a bunch of holding and misc costs that I did not break down. For example. Our realtor is our friend and she lent us money for the granite and was sure that it would sell at our asking with granite installed.

When we sold our house, we made sure we paid all of our debts in full, and we only have 4.5k debt left to pay off on our credit card. 

All in all, we lost about 4.5k which is a 2.25k split between us. But like I said, we gained a crap load of knowledge. 

An Escalation Clause, not my definition, but one I agree with:

An escalation clause, or “escalator,” is a section in a real estate contract that states that a prospective buyer is willing to raise their offer on a home should the seller receive a higher competing offer. The clause will state how much more the buyer is willing to pay than the highest offer and their spending limit. Essentially, escalation clauses offer buyers protection if other potential buyers outbid them. Took it from this link: Escalation

So here's a simplified, applicable version of this example:

1. My realtor finds a great deal on the MLS. Let's say the property is listed at 50k and ARV is 100k.

2. I run the numbers and make sure it makes sense. I buy at 70% - repairs. If our price is not too far from that, I schedule a time to walk the property.  

3. I walk the property and liked it. 

4. I make an offer. 

Escalation Clause:

My offer is 35k with an escalation clause to 45k. 

That means 45 is the max I am willing to pay. If this reaches multiple offers, my offer will still be higher than other offers until it reaches 45k. 

This is awesome for MLS properties because I promise you, your eyes are not the only one who sees this property.

There are drawbacks to this, but I love using this strategy for deals we find on the MLS.