All Forum Posts by: Ward Conville

Can you get a credit line against your personal residence or one of your other properites so you have access to cash in an emergency? If not, I think the numbers are too close.

I did a private loan with my parents. They were interested in getting a higher return that a CD. We did a five year note with interest only payments at 5.5%. We formalized it with a recorded Deed of Trust. It has worked out wll for both them and me.

I appreciate the comments. Let me add some more details. I think when renovated, the houses are worth about $60,000 each in this market. I think I am going to be able to get then under contract for between $40K - 45k each. I am estimating about 7500 in repairs per house, which keeps me below after repaired market value. All four have long term tenants who have indicated they want to stay. My plan is to let them stay and renovate each one when we have a change over in tenant.

This is my first time using a private lender and I agree the terms are great. Let me explain how I fell into this. I currenlty have 12 houses. I have one on 30 year Freddie Mac loan, I have five with a bnak in house portfolio loan, 15 year am, 5 year balloon at 5%, and 2 more on a 15 year adjustable, which is currently at 5.5%. I have two more on a HELOC that I plan to get either bank financing or private financing for to free up my HELOC. My private lender is a friend/mentor who owns several hundred paid for units. I ran into him after he had just renewed a few large CDS and was complaing about the 1% rate of return he was gettting a long term CD. I decided at that point to approach him with with a win-win idea. Loan me the money for 5 years and I will pay you 5 times what your are getting from the bank. He reviewed my business plan for these agreed to do it.

Mitch,
Fair point regarding FMV. Let me expain futher. Value is hard to pin down and 3 of four houses need new roofs, 2 of four need some foundation work, all four need major cosemtic work.
I put in a low offer because with private lendor I am willing to waive an appriasal and inspection. I think if seller is relying on a purchaser needing a bank loan the condition of the properties could cause issues. I am hoping my ability to close quickly and with no contingencies may cause seller to accept a lower offer.

Hello,
My first post here. I have been very pleased with the discussions I have seen on this site. I am a part time investor with 11 SFH and 1 duplex. I made an offer on a set of 4 houses for $154,000. Seller rejected offer and refused to counter, says I was too low. He has them listed for $204,000. Gross rent on the four is $2900/month.
I have private money lender in place who will give me loan for full purchase price at 5% interest only with a 5 year balloon. I think the FMV of the houses is probably $180,000. With the nothing out of pocket on the purchase, giving me an infinate cash on cash return. I estimate net profit here of $1000-1200 a month after interest only mortgage payment.
I am tempted to pay what it takes to get this deal done, up to $180,000. Am I missing something here?