All Forum Posts by: Shawn Scheinoha

I am under contract for a property located in Dahlonega GA.  My investor decided to use his money on another project that will give him a larger return.  I purchased this property after he committed to financing it for me.  This is a little unfortunate but this will give me the opportunity to work with someone else. 

Terms can be as low as 12 months but I would prefer something 2 years or more.  Im not sure what to expect when it comes to interest rates.  My credit lines and private financing I have used in the past were pretty good. 

I would consider conventional financing but I would prefer private financing with someone that might want to do more in the future.

Thanks again for the comments and offers.

Details:

Purchase Price 255k (Should appraise out at 325 to 350k)

Property will generate $4500 to 5000 in gross income.  Est $: Duplex 1800, Building A+B  3000

7.5 acres 

Less than 10 minutes to North Georgia University and Downtown Dahlonega

Property is in great condition and will start earning revenue right away.

I have finally gotten tot he point where all my own credit lines have been maxed.  My realtor recommended an investor that wants to fund my next two deals under contracts.

Details,

They about the same price and total 140k (rehab money not included)

He would like 6.5% per annum until the full amount is paid

I am required to put down a 10% good faith payment with the closing attorneys office that will be refunded to me at closing.  I will not be bringing any of my own money into the buying of these properties.  My funds will be going into the rehab costs.

Payment required is $2000 per month.

I can pay off the loan at anytime with no penalty.

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My questions and thoughts are the following.

1. The 2k per month seems high.   I'm assuming this is reducing principal but is not stipulated on the contract I just received. 

2. The interest seems very fair and that's probably due to the successful record I have had with all my past deals that my realtor has walked him through.

3. Is there anyone I can send the contract to here for advice (a fee is fine)?

4. My own out of pocket will be about 30k per property.

Any advice is greatly appreciated!  Thanks for taking a look at my post even though I have not been very active in the forums.

Regards,

Shawn

The suggestions from the other members here are great!  

The only thing I can add is the owner could be on the defensive and his pride is going to keep him from doing anything to help.  I would refrain from becoming another person that he is going to have a grudge against.  Let the others in the neighborhood or at the city become the bad guys.  If you can build some rapport with him you may become the excuse to get the property back into shape and rented.  No one is going to bully or force a guy like this into doing something, even if its good for him.  I ran into a guy that said he didn't have to keep up his hard because this was America and its his right....   He eventually started keeping up his hard but only after people quit bugging him about it.

By the way, I have never seen one house drop the value of the entire area by as much as your realtor is spewing out.  150k down to 95k down to 60 or 70k....  This data does not pass the smell test.

I just subscribed to your channel.  Keep the updates coming....

Im looking into costs for building two duplexes on some property I have.  All of them will be 2 bedrooms and 1 batch.  If there is a huge cost saving i might build one 4 plex.  

What size and type of duplexes are you building?  Are you building them to sell or keep? 

JD, Thanks for the reply.  I was able to secure funding from one investor for the entire purchase price.  Terms are 6.5%, 18 Months, no-prepayment penalty.

I reached out to some past colleges and two responded almost immediately.  It seems that there is some money leaving the stock market right now and these types of deals seem to make sense for people.  

It would be nice to start using this kind of money for my flips instead of my credit lines.

I got an offer accepted on a triplex yesterday that was accepted. 

Sales Price - $117k
Rehab 18k
Two of the 3 units are rented
One unit is vacant and needs all the usual.  Paint, floors, fixtures, appliances etc.
These are all 3 separate small houses. 
Already approved to build one more house or mobile home.
15 minutes from a university.  We have s shortage of rentals in the area.

Onto my question.  
I have always paid for my deals out of my own credit lines but they are tied up in a few deals that have not closed yet.  I would like to get investor financing on this for a year so I can get some seasoning on it and then refi into a conventional loan.

I have the money for the rehab so I'm going to need 117k to pay for the property.

What rate should I expect to pay an investor for a 12 to 18 month loan?  

I have someone that is considering the deal bit no rate has been discussed.

The cash flow is strong so I can afford to pay a higher rate for now but what might that be?

Assume all my finances and credit are strong.

I'm sure this will not be the last time this happens.

Thanks in advance!

I meant...Ethan, I'll give them a try.  Thanks

Return, I'll give them a try.

Hunter, thanks for the info.  I have a great agent that works my local area bit I'm always interested in deals worth doing within an hour or two from me.

Shaun, I did get all the permits.  Fortunately the building was already there with power, water and sewer.  I simply split the building into two 700 sq ft units.