All Forum Posts by: Andy M.

Is your original seller aware that you have end buyers lined up? If so and he is okay with you making a profit, then you have multiple options. I would definitely never take title if you have buyers ready to go. You could do an assignment of contract. If the end lender is funny about that then you could create a contract with your first seller and structure your fee as a commission of sorts., trouble is he will know what you are making. Sometimes people are okay with a profit in theory but their greed bug bites when they find out how much you are making.

I would cater to the needs of the new buyers lenders and work out details before hand with the original seller, that should help the process go more smoothly for the end buyers new loans.

Hate to generalize section 8 tenants but 99% of the ones I've ever run into were a bit of a hassle. I only rent section 8 when it makes a lot of sense, basically I need to be able to net $300 + more dollars a month over a normal tenant. Then I do my best to keep them as long as I can. That said, I'm sure they are not all leeches on the government who have figured out how to work the system for their job.

I just want to second what Vic said, every interaction you have with an investor is definitely building their perception of you. I know when I'm talking to a newer birddog/wholesaler they don't get very long to impress me before I stop taking them seriously.

IRA Wealth is a pretty good book.

I would say a 10 cap would need to be a minimum standard. Personally I would want higher than 10 even.

Mike, just because it wouldn't make sense for you to sell a property owner financed doesn't mean it doesn't make sense for someone else. Once you start talking with motivated sellers the sky is the limit. I've been really surprised in the past about what I've been able to talk a seller into.

Example: I bought a 4-plex last year from a seller who financed me at 0% interest. You read correctly, 0%! every payment to him goes straight to principle. The really cool thing is that the term is for 12 years. I'll own the building free and clear in 12 years if I just make the agreed upon pmt (and why would I pay extra? You can't beat 0% interest, any where else I put my money beats that). On top of that the property cash flows after all expenses (utilities, on site management, repairs, etc). Which is all a bonus as far as I am concerned.

Point is, I would never finance someone at such crazy terms, but if your seller is motivated enough they might. I found out what the seller really cared about and I gave him that. Don't assume that sellers care about what you care about. A good rule for life and real estate investing is to give people what they want, and you will get what you want.

Hope that helps..

Jon has great great advice. I especially like the part about putting as little down as possible and keeping your powder dry. A great cash flowing property with little to no money down creates really fun ROI conversations. :)

I would strongly suggest making sure the ROI on your rental is good. Don't buy a mediocre property just to have one, rentals almost always cost more than you think. If you can't find what you want in CA just go to a different market. With some research it seems you can find good properties with great ROI's in other parts of the country. even paying a property manager in other markets might still get you substantially higher ROI's than in CA.

Kevin, if people are asking you for 5k to teach you then you are talking to the wrong people. You do need to put yourself in the shoes of the experienced investor though in order to understand... You need to bring some value to the table for them to take you seriously. There should be investors in your market who are where you want to be. Find them, find out how you can help them and make friends with them and you will learn from them about the business in your local market.

Tried an REI club?

Mike, if someone owns their house free and clear and they want you buy it they can be the bank for you and you both can negotiate on the terms of your payMents to them. If they don't own it free and clear then you can consider taking their mortgage "subject to" their existing financing. This is mostly done through a mortgage called a "wrap" or an "all inclusive trust deed".

Basically the sky is the limit. If you find a buyer willing to sell and hold terms then you can negotiate everything from there. I frequently make sellers multiple offers, one being all cash, another being seller financing, and generally one offer that is a combination of both.

Hope that helps. Lots of info on BP that deals with seller financing.

@Dennis-I'm not getting a loan, I'm loaning the money.

@Mike-Even though my companies funds are also involved in the transaction the % ownership is divided up so each contributer to the loan is responsible for their % profit/loss/contribution/etc.

I appreciate everyones feed back here. I feel comfortable now moving forward loaning money under these circumstances. If anyone that understands the situation has specific knowledge that the IRS frowns upon these transactions let me know. My administrator (American Pension Services) doesn't have any problem with them.