All Forum Posts by: Ricky R.

Kevin. Thank you. And I've put together that file to the best of my ability. It's the finding of the bridge, reserves, etc partner that's been tough. And I have a pretty big network, just going tough at the moment man. Kinda beat down I guess. But ill get through it. I always do. And I'm sure it'll all work out in the end. Sometimes you have to hear 100 no's first lol. Thanks buddy

Huh, great points Scott. As far as the 35% equity, in what form besides cash, if any? Thank you btw!

Well no Darius I'm not really specifically looking for a lender in this situation. I have a lender and a little money but not enough to meet a 33k cushion and 100k bridge to cover the 70/30gap. So in particular I'm looking for a partner who can help bridge that gap. My problem over the last few deals has been finding partners, not lenders. Guess I should have been more specific. As far as the deal goes, I'm not really fixing anything. I'm either immediately flipping as it sits or building homes on the lots. So I understand where and why a reserve cushion would be needed but in the case of a buy and flip the fact that I don't have $33k sitting in my savings acct and can't find a partner to save my life resulting in losing the deal just urrk's me a little. Let me ask you, if it's comes to that which I hope it won't, what are my options legally at that point? Besides assigning the contract? Are double closings even a legit thing? Or are there no more options? Thx Darius for your reply my man!

Eric. Thank you. That gives me a bit of insight through the lenders eyes. I guess my biggest issue is trying to wade through all the bs and scamming to find a truly genuine person who wants to help, believes in me and with whom I can build a long term relationship with. I'm confident if I found that person and had an opportunity, I could show them what I already know. 

In terms of what you're looking for in someone who may not already have the yrs of experience with private lenders, in what way do you like to see these things structured? As in what they bring to table financially or that they've done their homework and research is based on more than finger crossing.. Like bullet points on paper, a phone conversation? Does what they bring financially need to be cash or can it be equity or titles or bartering lol. This is more geared towards the newer investor that's starting with nothing but a lot of determination and passion. Thanks for your insights!

Scott you make a great point buddy. Even though it's not my business page on BP I'm still the face of my company indirectly and the first thing someone sees. Thanks for the insight. And obsiously something I already knew and didn't even realize it. Thanks again

So I'm super frustrated because I'm on my 3rd deal and I have yet to successfully find a credit partner or the infamous private lenders I read about in the books. I studied, and networked, and podcast, and webcast, and went to reia meetings for a whole year before I stepped foot out to search for my first deal. When I found it I searched so hard for a way to fund that fix and flip. Nothing. Luckily I used creative financing as a way to buy and out of the box thinking as a way to sell the deal (sub2- lease option) without having to have much money. No offense, but Brandon turner, the you tube guys and the literature made it sound so easy to find these people but for me it's been my biggest shortcoming. My second deal, same way. Here I am on my 3rd, same thing lol. This one I actually found a private lender, legit, did all the paperwork to find out a week later I needed 10% in reserves. 35k in reserves. Now on the verge of losing the deal or having to assign it when I know there's 6 figure profits in this deal. All because I can't find this unicorn credit partner. Am I saying the wrong things. I don't get it. I'm actually in the real estate field in a different profession as well and I have realtor and investor clients. But I can talk about this deal till I'm blue in the face and still have no luck. It's very frustrating. Bad thing is if I could make this work I'd actually have enough money to play with from now on. I dont know I think im freaking out bc the seller wants to close and im having to stall. If I screw this one up I don't know that I'll have the level of excitement for re investing that I once had. I'm a fighter and a positive thinker but man this has got me down. Any advice would be great. Although I'm not sure there's an avenue I haven't covered in search of this mythical money partner creature lol. Rant over

Investment Info:

Single-family residence other investment in Haw River.

Purchase price: $48,000
Cash invested: $6,000
Sale price: $85,000

Absentee owner, distressed property, bought sub 2 giving owner 1k at closing and promised 1k per year for every year it was kept in her name, up to 5 yrs. Done minor rehab and lease optioned to a family who remodeled homes for 2 yrs at 800 per month,(my mortgage was 400 per month.) And 10k option fee. They finished rehab work and 2 yrs later exercised their option at 85k - 10k option fee= sold for 75k. Note was then at 42k. Give seller 2500 at disposition

What made you interested in investing in this type of deal?

I wanted to get my start in real estate by any means necessary.

How did you find this deal and how did you negotiate it?

Pounding the pavement. Made an appt to meet with current tenants to look at home. Owners were out of state and their family friend tenants destroyed the place. So they were ready to wipe their hands of it

How did you finance this deal?

Sub 2 with initial seller & 2yr lease option with end buyer.

How did you add value to the deal?

This was my first deal and I had zero money. I tried and tried to find private money or a partner to do a full rehab at first. Contrary to how easy it is for others to find partners and funding, I damn near give up on this deal because I couldn't. Oddly enough still having that problem lol. Truthfully, most prob thought the house was a lost cause or needed too much work. I spent 1 yr learning and networking prior to searching for the 1st deal so I felt I had a good foundation to build upon

What was the outcome?

Luckily found a way to buy the home with hardly no money to start, put a lot of nights work in, going after my then day job, to get the place presentable.. with hardly no money. Then found a way around finishing the rehab while cash flowing for 2yrs, and selling for a substantial ROI.

Lessons learned? Challenges?

The biggest lesson for me was to not give up. I heard a lot of no's and a lot of laughs. I couldnt even find anyone to assign it to. I was busting my *** and spending every extra dollar trying to buy and close and rehab, inspection, appraisal, not to mention the mess the tenants left me. Hope was fading fast Funding/credit partners was by far THE obstacle and in many ways still is. Lol Brandon turner makes it look easy but for me it is not. So I started studying creative financing strategies!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I met a lot of great people along that path. Learned a lot. Faced adversity. Overcome adversity. It ended up being so much more than a home investment. Looking back I wouldn't change anything but probably would try to stress a bit less ! And boy am I glad the first one is done 😅

Hi Guys,

So im wrapping up my first lease option that I bought using "subject to" method from an out of state distressed seller. Took over $48k mortgage with $1k to seller at closing and $1k due to seller when house is sold for every year that the mortgage stays in their name..up to 5 yr max. Sold the house via lease option with $10k option fee, $800per month rental rate for a 2yr term with the agreement that he finish the leftover repairs needed to home (which has a $125k ARV). And finally an $85k sale price if they exercise the option. So ive closed on the sub 2 purchase and im to signing day of the lease option. My question is this..

- the buyer asked what happens to his fee and the money he's put into home if the house gets burned down or destroyed..whether partially or fully. The lease states this " DESTRUCTION OR CONDEMNATION OF PREMISES. If the Premises are damaged or
destroyed by fire or other casualty to the extent that enjoyment of the dwelling unit is substantially
impaired, Landlord, in its sole discretion may elect to repair the Premises or terminate the Lease
upon thirty (30) days' written notice to Tenant. If the Premises are condemned or cannot be repaired,
this Lease will terminate upon twenty (20) days' written notice by either party".

So I obviously know my insurance will pay but can anyone provide anymore insight as to how I should interpret, handle, explain, insert additional clause in lease, etc to be fair in the unfortunate instance that this may occur? Should I state that any money  (option fee, repair costs) will be refunded if i terminate lease, per contract? What else? Any feedback would be great as we are signing tomorrow. Thanks BP!!

RICK

Surveyor !

Hi Bp, 

Ive been working on one of my first couple deals and already feel like a seasoned investor. Ive learned so much and have moved past so many obstacles with this deal. Its really testing me. The last tenants absolutely trashed the place and no one really saw the potential there that i did. But i kept with it and kep going when everyone said i was wasting my time. And im almost ready to pop out that tunnel if i could just get her closed. Target date is jan1. So herein lies my problem. Im acquiring the distressed property from out of state owner by way of sub2 coupled with a land trust. Or at least i think i should for the obvious benefits as well as to stay under the radar. I already have my lease option buyer on board for a 2yr term. So aquiring at payoff- 49k, new buyer is finishing repairs for a 100k sales price - 10k nonrefundable option fee. My PITI is $466, buyer is at $800 a month with a $100 a month credit when rent is paid on time. So you see, this is why i need help. I don't know the EXACT steps to take with paperwork, who to inform of the change to a trust, how to set up trust with no doubts, in what manner to set up insurance, who to use as trustee/hold escrow, etc. Im sure i could wing it but I've come too far to screw this up from negligence. I don't have $700-1000 to pay for a trust & sub2 package until right at closing which does me no good. Yes i know, things are just tight guys. I'm trying. But if anyone thinks they might could be of some assistance i will def work something out with you. Thanks in advance BP