All Forum Posts by: TJ Thompson

I found a house that I'm interested in buying.  It's a fixer upper for $44K.  I don't have a realtor, so I called the listing agent.  He's out of town at a conference, but he said he could call someone from his office to show me the place, but if I was going to get an agent then he said I'd need to have them let me in the house instead.  

So it's Saturday here, and I'm wondering if I should rush to find an agent (I don't have any strong realtor recommendations right now), or if I should just plan to proceed without one.  What are the pitfalls I should be aware of?

My father in law, who lives in town, just recently let his realtor's license expire.  So he can't be my agent, but he knows the process well enough that I wonder if he can't just help make sure I don't forget to cross any t's and dot any i's, bt without an official realtor.  

What do you guys think?

Thanks for your advice, @James Wilcox. I've just signed up for the Lexington REIA group on FB that you sent to me, and I'm going to start going to those meetings to see if I can start meeting the right people and putting a team together.

If I'm understanding your question correctly, then it's two years not one, and it has to be your primary residence during those years if you want to avoid the taxes.

Howdy, ya'll.

I'm 39 years old and retired from my first career (engineering). I currently live on my passive investments, which primarily consists of dividend paying stocks, private equity, and REIT's. My family lives a good life with no debt. But... I'm getting antsy for a little more action. I've dipped my toes in REI before (owned a rental, did some HM lending a few years ago, and did one JV as well), and now I'd like to dive in with a BRRR deal.

So I've got about $100K in cash ready to invest, and all the time in the world to make this a success.  My advantages are that I have time, money, financial intelligence, and I'm capable of extreme hard work when necessary.  My downsides are that I have limited experience, no local connections, an introverted personality, and I'm lacking in confidence.

So what would you recommend I do to get started?  There are no REIC's in my area that I've been able to find, and not many people on BP in my area.  Should I go find an investor friendly realtor?  Should I even have a realtor?  Should I find some potential properties I like first?  Are there books, videos, or other info I should check out before choosing a property?  Are there questions I should be asking that I don't even realize?

I think if I had a mentor I could trust this would be so much easier, but alas I don't have one and I'm not sure how I'd even find one.  

I can't tell if I'm being too reluctant to move forward, or if I'm being too aggressive. I think that if I have one successful deal with a flip or BRRR I'm going to become (1) addicted and (2) highly successful.

My goal, I think, is to use BRRR to build up a portfolio of rentals that pays $3K-$5K in monthly income after expenses with as little seed money as possible, and to do this within the next 9 years (when my oldest kid will graduate high school).

Thanks in advance for any help.

@Kelley Schneider "Plan B is we hold it and rent it out since it's a good rental market where this townhouse is at..."

Why would your lender, who is lending 100%, be willing to rent it out as a plan B? That seems like a lot of money to lock up for rental (unless he's getting 100% of that). Otherwise, it would just be in your interest to sit on it forever and get free rental cash-flow and hope that the market goes up, not down.

I did a deal like this as a lender, but we simply took over the mortgage and I paid the rehab costs ($7500), and the deal was lease-to-own, so we had a timeline and a target sales price. That;s the only way I'd loan something with such little margin for error. So I'm just trying to understand the upside for the lender.

@Corey Wogtech For me, as a HML (although not the most experienced), it comes down to the numbers presented. If you are asking for 60-65% ARV, have the contractor's budget and schedule that can be reviewed in detail, and have an appraisal that shows the numbers all match up, then it's probably something I'd consider.

No track record would require a lower LTV, and a proven track record in similar homes in the same area may allow for a higher LTV. Some people will also tweak points or interest based on these things too, but for me I prefer to keep that mostly constant based on market expectations and modify the LTV I'd consider.

As long as I have the first lien, I don't much care about how any secondary money is worked out (JV, or otherwise). But as others said, the numbers probably need to be pretty sweet for you to make that worthwhile. Otherwise, you're putting in a lot of work, paying a high interest loan, and splitting what little profit is left.

@Bryce Cutler What's your lender's protection on this loan? If this is his first time and he only has the secondary lien lending to a first time rehabber, I'm just curious if he knows what he's getting into.

No offense to you, of course, since you may know exactly what you're doing. But second liens are much riskier by nature.

Hello BP -

I have quite a bit of cash uninvested right now. I already have some money invested in a private lending company based in Denver (Pine Financial), and I'm looking to invest similar funds. I'm happy with Pine, I just want to diversify into other companies and geographic locations.

Can anyone recommend some other funds like this?

Alternatively, if there's anyone looking for private money that's based in or near Colorado Springs, feel free to contact me. I've done a few deals here, but I've had that money sitting idle for awhile now.

Thanks Joel. I'm actually already invested with Kevin in my SDIRA, so maybe I'll reach out to him regarding this as well.

I'm working on my first deal as a hard money lender. I already have an investor lines up and a house proposed. The terms are 2 pts. + 12%, and the loan will be for ~75% of the ARV.

I'm also in the process of finding a good real estate attorney to consult with on the legalalities of the deal, and how to protect myself.

My question is: Are there any state of federal restrictions for me to do this without a broker's license (or any other real estate type license for that matter)? I need to commit to the deal today, and since I realistically won't have an attorney by that time, I'm just looking for initial feedback. From the research I've done, no license is required to lend to an investor looking to flip the property, but I want to be sure.