All Forum Posts by: Steven G.

My husband and I saw a few HML's on the BP site and wondered if anyone has any experience with these guys?
- I do not, but here is a list of other real estate hard money lenders too -

[REMOVED]

If we don't have a "track record" or RE portfolio is it going to be difficult to get short term financing? 

- That depends on the lender. If you have zero or little experience with remodeling real estate...estimating repair costs, dealing with contractors, knowing what needs to be done first, second, third, etc during a remodel...I can imagine it will be harder, though not impossible, for you to get a hard money loan. The more experience, better credit / income / assets you have ... the easier it is to get a loan, whether you are dealing with a hard money lender or bank. However hard money lenders tend to always be the 'easiest' of the guys to get money from.

Will the HML's want lower than a 70% LTV with no track record and still charge a bloody fortune? Any feedback is greatly appreciated!
- They all tend to charge high rates. 3 points up front + 12-15% per year is not unheard of

Where do you search to find out if everything is ok with the home?
- Its good practice to ask the seller if they have any liens or back taxes on the property (95% of homeowners know this), when you are explaining how the closing/contract works (many folks are naive about real estate contracts), and I have found most folks know approximately what they owe (not necessarily to the dollar on what they owe in taxes...but kind of close). This will immediately tell you if it is a good deal or not. If it looks like it will work out, just put the place under contract and send it to the title company. It's the title company's job to do the research and find if there are any liens, etc.  Note: You can learn to do basic abstracting (title research) work yourself...but that's not a required skill to be a real estate investor. I would not recommend that for newbies...in the beginning it's always good to use a title company with title insurance on each deal.

Also is the only time you deal with the title company is once you have a completed contract?
- Usually, yes.

I don't like it. Your formula does not factor in maintenance (e.g. one big repair such as a new roof could eat an entire year's profits or more), vacancy, evictions, etc. And being only $525 a month rent, you're probably dealing with a lower income part of town (just guessing)....and those properties tend to be higher maintenance and also have higher tenant turnover. And also, the taxes seem a bit high for a property that's only worth $20k (could you get them lowered by protesting them with the county?) Personally...if I could get $700 /mo rent for it - I would go for it - depending on the neighborhood.

$6,300 - Gross Income
$1,950 - Ins/Taxes
$630 - Mangement
$3,720 - Income Before Maintenance, Vacancy, Evictions, Etc

I think it looks like a pretty solid plan. I would definitely look at putting all your properties into LLCs or one LLC, unless they are leveraged, in which your lender probably would not approve of it. You could also setup a DBA for yourself, and your LLC and/or future LLCs; note different LLCs and you yourself can all have a DBA with the same name (e.g. Ryan Properties), and then you can setup a website with a corresponding name - ryanproperties.com - then use that so tenants can pay rent online, look at information about your company OR properties & submit maintenance requests online. Your business card can even say "Ryan Properties" on it.

Note - RentPayment.com is a low cost & easy to use service for getting rent payments online; I highly recommend them.

Anyway...good plan.

Tampa Bay...guru city. That's home of Kenny Rushing if I remember correctly. Look up that guy on Facebook...he'll motivate you to give wholesaling a shot. =) Welcome to BP!

Its up to the lender. If its a traditional lender, IE Bank of America, they might require it - but to my understanding in zone X areas most lenders do not require flood insurance. However ... it so cheap ... why not get it for your property anyway? Its better to be safe than sorry, when it comes to things like flood insurance. I would get it.

Hi Kamran,

- The best way to watch the MLS for free is via a website like ZipRealty.com - you can create a free account there, and setup a search (e.g. house in Dallas or a certain set of zip codes in Dallas, under $50k), and once a property hits the market you'll get an email automatically from them.

- Visit these websites to get on a couple wholesaler's email lists:
http://stevenbuyshomes.com/forinvestors.html
http://www.homewoodproperties.com/wwwhomewoodprope...

- Condos and townhomes are OK, but just be sure you buy it right and the HOA dues are not too high. What you don't want to buy is a condo that is $20k, rents for $500 /mo and has $300 /mo in HOA dues - those places DO exist in DFW - yikes. An ideal condo or townhome would be at least 2 bedrooms, rent for at least $600 a month and have no more than $200 /mo in HOA dues. Even more ideal would be one that gives you $500 /mo or more in gross cashflow, after HOA dues. And with condos, you have to keep them rented otherwise the HOA dues will kill your bottom line...so start with only 1 or 2 and make sure you are good at renting them, whether you do it yourself OR use a 3rd party, then buy more.

- Its hard to lose with lower end single family homes you rent out, as long as the repairs are not too expensive and you buy them right.

- Also, what the other poster said about doing rehabs is a good idea. You can easily do rehabs where you buy, fix & sell a house retail...as long as you have the cash to do it and do not need to borrow any $ (I know you said that's not allowed in Islam)

Good luck!

I have had a property or two like that. It will be a problem for some people, unless level street parking is available. When you have houses on busy streets, or with steep driveways, etc ... you cannot lose if you (a) buy the property for a lower price than you normally would (as inherently the property value is lower because of the undesirable situation), and (b) you have slightly lower than market rent - you'll always have someone willing to rent the place for a couple hundred bucks less that will just "deal" with the inconvenient driveway.

I have never seen that done around Dallas/Fort Worth, but it sounds like a great idea. The only big problems I could see with the business idea is (a) keeping the apartment complex from competing with you, but you can get around that by doing a contract with them for a set amount of time and also compensating them sufficiently so they won't want to bother competing with you and (b) I think you might cross into some code enforcement issues in some municipalities if you do that. The code enforcement officers might not care if the complex advertises a For Rent special, but if they put a Dunkin Donuts ad on their building or fence that could violate a local law of some sort regarding signage. That'll depend on the city you're doing business in of course. But good luck with it - it definitely sounds like an interesting idea worth pursuing.

I have heard some investors who were not realtors say its a disadvantage to be a realtor, because of x, y and z reasons. Like what? A) your real estate license will require you to make more disclosures than an investor would and that will intimidate the average Joe Seller. B) you have to be careful when buying/selling directly with people as you don't want to have any conflicts of interest. C) etc. Yes, those may be factually correct statements, but I have gotten to know numerous realtors and/or agents who are very good real estate investors. So, in the end, no, it will not make a big enough impact that you will need to worry about anything. Just do your business ethically, morally and compliant with the law...and you should be A-OK.

As I said, I know realtors who are VERY successful at doing notes, rentals, rehabs (that they fix/sell retail), wholesaling and even subject 2 rentals & assignments. So don't let your license keep you from trying anything. A matter of fact, you have some advantages...e.g. you can take a 3% commission on anything you buy/sell on the MLS, where us non-realtors cannot do that (in Texas anyway, lol).

Good luck!