All Forum Posts by: Ryan Blake

I suggest getting in contact with @Dan Beaulieu. He is an investor and lender in Chatt and knows the area well.

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@Jesenia Matias These are all just my opinions. Take if all for the price you are paying.

I think mentoring groups tend to be a waste of money unless it is a reasonable fee like under $4k for the year. I think networking at local events to the area you are working in is priceless. Mastermind events can be good but still, try and keep it local. I would talk with your lender. After you have done 2 or 3 fundings through them, they should offer you a discount for loyalty. If you have time, source your leads your self; drive the area you invest in and look for distressed homes, door knock on the foreclosure list, use door hangers when you see a home you really want. These are all time consuming but you will have a better return.

What areas are you investing in? Wish you lots of success!

Hi @Jacob Maes! I am an investor in DFW. Started with my first flip back in 2009, started long-term rentals in 2011 and started short-term rentals (airbnb) in 2019. Welcome to the world of investment real estate! Its a wild ride but always worth it.

@Tristan Bulot Why would the equity still be the seller's? Are you closing on the property and putting it in your name? That would mean you own the property and any equity in it would be yours. The seller will probably want a lien on the property to protect their interest but that would be it.

You will need to find a lender willing to take a second lien position on the property. These can be hard because if anything goes wrong, the first lien holder with be in position to recoup all costs first. There are lenders that will take a second position but you are going to pay extra in interest and fees for it (in most cases).

I see you are paying $0 and need $55k for your rehab. How much are you putting towards the rehab or are you trying to borrower all of it? That will make a difference too. If you have no assets to guarantee a loan before and if this is one of the first deals you are doing, it will be difficult because of the high risk of default.

I think you best bet is to put together a detailed pro-forma with the tools on this site and visit with family members who may have cash or equity in a home, then with local investors in the area, then with hard money lenders, then finally with local small banks. It will be an uphill battle but if you believe in the project, it will be worth it.

I would suggest Decision Financial Tax Services. They are based in Tarrant County and have a lot of RE clients. They know the ins and outs of RE investor tax strategies. I have used them for 3 years now. 817.268.9352.

@Lauren Shelly I know people have different definitions of hard money vs private money. To me private money is money that is lent from someone who is not a professional lender and is lending out their own private [personal] money. Hard money is money that is lent from a company or individual that has collected other people's money to lend out.

If you are looking for private money, contact your family, friends, and other acquaintances. That is where you will find private money. It will be from someone you know or someone introduced to you. If you don't know the person and find them on line or another marketing source, then you are dealing with hard money.

Hard money is basically the same thing as private money but without the personal contact or the organization and structure.

@Garrett Gruss and @Mora Clark Most cities in N Texas are implementing regulations, especially the larger ones. Like @Bruce Lynn said, you will need to do your homework. Some mid to small sized cities are not currently strict in their regulations because they don't want to foot the bill of litigation. Both AirBnB and VRBO are funding legal battles every time a city tries to enforce STR regulations. Some cities just don't have the funds to compete. This is what happened in the suburb of Grapevine and why STRs are regulated but are allowed in the city.

But more importantly, both of you are looking at a House Hacking situation. If you live the in the property as your primary residence, MOST of the cities' regulations don't apply. This has been upheld in courts across the country. If you were not to be able to do an STR in a home in which you live in, then that would leave some issues for people who have friends come to spend the weekend and buy them dinner or help pay for some utilities. Would that then constitute an STR because they stayed with you and you recieved payment in one form or another? This is why courts have had to allow STRs in residences where the owner resides in the home. Most regulation is for whole home STRs where the owner does not live in that house.

@Will Parks When using "Private Money" you are typically going to someone who you personally know. If it is a group soliciting you to take a loan from them with a lien on a hard asset, then they are a hard money lender.

Private money shouldn't be a scam as it should be someone you know. It will be a friend or family member or maybe just an acquaintance. Either way, you have a personal connecting with the person. Make sure everything is in writing. No handshake deals. This protects everyone involved.

Hard money is much trickier. There has been a history of abuse in this industry. I would look out for the following things:

1. 1) They do not require any money up front and all payments are through a title company. NEVER pay a HML anything before closing and all payments at closing should flow through a title company, escrow office, or RE attorney's office. After you close you will make payments directly to the lender but nothing should ever go directly to the lender before or during closing.
2. 2) What they offer should never be too good to be true. You won't find 7% hard money and 1% origination if it is your first deal. You may never find rates that good unless you are make a substantial down payment.
3. 3) Ask for references, recent closings, or other info on deals that have been done in your area. This should be easy for them to provide to you.
4. 4) Watch response time. You should be getting responses within 4 hours. If it is taking longer than that while they are trying to win your business, how long do you think it will take once they already have you locked in?

These are the big things I look for when dealing with HMLs. I took my first hard money loan in 2015 and have used them a lot over the past 6 years to scale my flips and rentals. Hope this list helps.

@Roberto Vasquez Still a solid deal. I know it is costly but that happens when you have a loan in an LLC. Just make sure you are still cash flowing at the level you want/need.