All Forum Posts by: Rick Stein

Are you buying to flip or to buy and hold. If your intent is to flip, you must figure in the ARV (after repaired value), your costs and desired profit. That will determine your offering price. It sound slike he wants full retails\ If this is the case, walk away. If on the other hand, you intend to buy and hold, the most important factor is the terms. Will he hold paper at an attractive interest rate? I have purchased several properties at market value because I got great terms either from the seller or a private lender. My main concern is cash flow and terms determine cash flow.

Good luck 

You can not discriminate based on source if income. It is a protected class. However, you can decline a tenant based on other criteria as long as the criteria is the same for everybody. Having said that, I have a number of Section 8 tenants. The general profile of a Sec 8 tenant is one who is irresponsible and will trash your property. I have not found that to be the case. Merely because someone is lower income, does not make them irresponsible. My longest term tenant, who has been renting from me for about 10 years is Sec. 8. I have had to evict two tenants in the past three years. Neither of them were Sec. 8. 

But, they might say “yes”if they say “no”perhaps  they really do not understand why. They may want all cash but don’ t understand capital gains.. Explain they will be getting a monthly check and their loan is collateralized by real property. If they still say No maybe some private lender would say “yes”

Hi, carol,

 Try to ask for the lowest possible interest rate and the longest term. You will be surprised what sellers say “yes”to when you simply ask. I have several seller loans and private loans at 5.5% and lower.

Good luck 

So many newbies lament the fact that they have no or little money to buy their first property. Yes, having your own money is good, but just as good is having access to money or using OPM. My favorite is owner financing and private money. It affords you so much more flexibility than bank financing. I recently closed a deal on a three family in which I put a little less than ten percent down with the rest on a note with the seller at 2 percent. You can’t get this from a bank. This  deal has good cash flow and great financing. You must think “outside the box” Be bold. Ask bold questions. As my mom would say,

“If you don’t ask, you don’t know”. One of my investors is a retired police officer who is has invested in four of my projects. With some he-has financed the entire deal including acquisition  and on others he covers the acquisition and most of the rehab at 5.5 percent with no financing costs. This is a vast improvement over the 1percsnt he was getting from his credit union. . He is very happy with the arrangement and, of. course, so am I! He allows me to delay the first payment for five months to give me time to rehab the property. Again, this will not happen with a bank. 

Just some thoughts on a Friday night.

Prepare a comprehensive Proforma. Include not only financial data about the property, but include community information that shows the area to be solid. Have a written estimate for the rehab. Include comps that show you LTV will be no more than say, 65%. In other words, show the prospective lender that you know what you are doing. I never ask anyone to lend me money. The word lending has a negative connotation of possible loss. But, people do like to "invest". Therefore, I ask them if they would like to invest in my project. I present it as a mutually beneficial business dealing in which we both win. By the way, I have many owner financed and privately finance properties in my portfolio. I own three family with owner financing at 2% (the previous owner really wanted out!) and several between 5-6%.

Good luck!

A crash or recession, although unfortunate for some , is a wonderful opportunity for investors. prices plummet and lending is tight. Great time for owner financing or private money. 

I have been in this biz for thirty years. As previously said, it is part of the deal. As someone else said as well, You are out of your element. Hire a good attorney well versed in tenant law and step back. Yes, it will cost you some bucks. but ,"This too will pass". About two years ago I purchased a two family and inherited both tenants. One is just fine. The other was a leach that the previous owner evicted TWICE and let back into the apartment because he did not want a vacancy.! He made my life miserable. I was eventually able to evict him as well. It cost me thousands considering lost rent, legal fees, painting, other repairs and other costs. It was worth every dime! I was able to raise the rent $150/month as the leach was paying below market rent. The new tenant is a pleasure. They pay on time and give me no grief. Yes, it was expensive, but what dollar amount do you put on stress? Every month when I get the rent (on time and in the full amount) I smile and sigh contentedly. I no longer have that S.O.B. and the angst  he caused me in my life. AHHHH ! :)

Number one: Get over it and go back to your REIA and start networking. REIAs give you education and contacts. Tell them about your project. If it is right and you speak to enough people, someone will be interested in speaking to you about it. Have you contacted the owner? Does he/she own it free and clear? if so, there is the possibility of owner financing. Think creatively. Don't tell me why you can't do something. Tell me how you can do it. List 5 to 6 possibilities without prejudging whether someone will want to do it. The answer to every question you don't ask is "NO!".

Good luck!

I would try to procure private money at a reasonable interest rate before seeking hard money.I have one private investor who has invested in four of my projects at 5.5% which is significantly better than he was getting in his credit union's money market account.Having said that, hard money works short term. It is usually lent for no more than a year. You can start out with hard money and then refinance. What about owner financing (my favorite).

Good luck