All Forum Posts by: Rick Stein

I must agree with Jay. Why 1,000 homes? Where did you get that number? What does it represent for You.? prestige? As a previous respondent said, " you will be in a rubber room" . How much income do you need to be happy? As for mortgages, you will never get that many bank loans. I would try for seller financing with low down payments and great terms. Alternatively, private money or partners work well as well. I don't want to rehash what everyone else has said. Just be careful what you wish for, you may just get it.

Hi, Ida,

I don't know if those rents represent market rent or not. I don't know the taxes and other pertinent financial info. Having said that, If you want hard money, they usually want a 65% LTV. I believe you would be at an 80% LTV ($80K purchase on a property valued at $100,000). Also, if you can get hard money, make sure you can refinance before taking the loan. Can you private money on it at a more reasonable interest rate than hard money?

Does your municipality require a certificate of occupancy on a resale? if so, you may not have any choice but to make repairs.

Do the current tenants have leases? Have you seen them? Who is responsible for water/sewer, utilities, minor repairs, etc.?

I am not trying to scare you or tell you not to take the plunge. I am urging you to do your thorough due diligence first though so you do not get burned.

Just food for throught.

Good luck!

Putting the arguable legality aside for a moment, let's talk ethics. I have been a real estate broker for 31 years and been an REO agent for about 25 of those years. I have been an investor for about the same length of time. I am on the board of directors of my local REIA and we hold numerous education sessions for wholesalers or wannabees.These sessions are always packed!! Yes, it is true that the vast majority of people entering the real estate investment industry do so because they do not have the cash to purchase a property.

  Many of these people, although perhaps well intentioned, are dangerous because they do not know what they are doing. They do not do  proper due diligence. They knowingly or unwittingly inflate the retail value, understate the rehab costs, have no ability to close on the deal if they do not find an assignee, who often times are as ignorant as they are, and, in short, give a very bad name to the industry as a whole. 

  On the other hand, there are many very successful wholesalers, licensed or not, who enter into a contract, make an earnest money deposit with their title company so they have an equitable interest, do their homework property, disclose to the seller exactly what they are doing, find a knowledgeable assignee who closes the deal and every one is happy. In my humble opinion, the latter example is perfectly ethical and does a service to investors such as myself. I recently was the assignee on a property that I closed on. I was happy to pay the assignment fee as I was getting value greater than the fee I paid. I did a nominal rehab and have rented the property to a lovely family generating a nice cash flow. 

There are many options open to you. For example, buy a property for $150k , put 10% down ( $15k) and ask the seller to hold paper for the balance at say 5%?. He would not have to pay capital gains in the note since he is not receiving the money. The 5% interest is a lot more than he would receive in a money market or CD. Of course you would have to run your numbers and make sure you have a positive cash flow, but that is a very viable option. Another option is to have an equity partner. He/she provides the money and you split the profits. This would give you money in the bank to do one in your own. How about a lease option or lease purchase? The poss Bikities are many but you need an education. I would strongly suggest joking your local REAI. 

BTW, the Mls is NOT the place to find properties. The best deals never hit the Mls. You need to do some marketing. Again, Bigger Pockets and your local REAI are excellent places to learn.

Good luck

I have been a successful Realtor and a successful investor for 30 years. As already stated, although the businesses over lap, the skill set is extremely different. Most agents know nothing about investing. In addition, as an agent you are working on a strictly commission basis. It is not for everybody. Unfortunately, the NAR let's just about anybody get a license. That's another issue for another forum.

does your existing loan have a due on sale clause? If so, the lender may for d to you pay off that loan when you sell the property. Therefore, the installment contract may be the answer. As stated previously, 5% is too low. I would need a lot more info to advise correctly.

Yes. I am on the board of directors. I have been a member for about five years and have found it invaluable to my investing career.

I would strongly suggest SJREA ( south Jersey real estate investors. ) We have about 480 members and offer lots of education and networking. Check out our website at SJREIA.ORG

Good luck

Trident Title is quite excellent. You can see them  at Tridentland.com. Are you the wholesaler?. Since you are not taking title, why do you need title insurance?Are you just checking to see if title is transferable?

You must ask him what his terms are. Generally, hard money is expensive, (i.e. 4-5 points and 12-15%). But, maybe he would do less. Also, if he is an individual and not an institutional hard money lender, he could make up his own terms. In this case, it would be "private money" He might offer you 100% financing for part of the equity if the LTV is low enough (generally, hard money lenders do not want the total loan, acquisition and rehab to exceed 65%. The point is to be creative.