All Forum Posts by: Duane White

Thank you @Kyle Penland, that is a good idea.  It seems that the best way to approach this is to run an example set of numbers on a property and let the numbers speak for themselves. I will make sure to update.

Thank you for your reply.

Hi All,

I have a few people I know that would be interested in investing money with me for down payments on potential buy and hold deals, but, before I go out and start looking for a property, I would like to show these future investors a couple ways we could go about structuring a deal. 

 Does anyone have any suggestions on how and what to present to these potential private investors when I do not have much of a track record yet?

Thank you! 

Thank you @Joe Villeneuve, this give me something to go off of. 

I appreciate your expertise and thank you for making it easy to understand.

Duane 

Got it, thank you for the clarification.  This break down seems like it would work well for a fix and flip, would it work for buy and hold as well?   Could it also be done by executing  a promissory note with the cash partner, where the note is drawn out for a longer period say 5-10 years at a lower interest rate, at maybe 3-5% and refinance out the down payment after that the agreed upon amount of time?

Thank you,

Duane

Hi @James Wise,

Being a new investor, I'm just not sure what type of marketing will produce the best results and I am sure that is subjective because it depends on how much effort is put into any one type of marketing technique.  And the same goes for financing, one can become an expert at executing any of the financing options whether it is sub to's, owner financing, etc. it just depends on where one wants to put their effort.

I suppose I kind of answered my own question here, but thank you answering my question, it helped me to expand my own thoughts.

Duane

Hi @Lou Castillo , 

My strategy is actually buy and hold.  And now that I think about it, you are correct in saying that direct mail is a marketing/acquisition strategy and subject to/owner financing and private lenders/partners are financing strategies. 

Being that I am a buy and hold investor, what do you think would be a better use of my time, money and effort, to market like a wholesaler for deals, get deals from a wholesaler or take my chances with finding a good buy and hold deal from the MLS?

And as far as the financing goes, I assume that is just a matter of me picking a strategy and getting good at that one strategy, be it, sub to, owner financing or going the traditional route, putting 25% down, going to the bank and getting a loan? 

Thank you for your time, I appreciate your willingness to expound on my questions.

Hi @Joe Villeneuve, thank you for the break down. I have asked several other investors this same question and I haven't got more than a couple sentences from them, maybe its not specific enough, either way, I appreciate your willingness to expound on the subject a bit more. 

Currently I am seeking down payment money (cash partner) because I still have financing available to me.  And I will be the one doing the heavy lifting and management of the business etc. as you mentioned this is your current strategy as well. 

So, let me see if I have this correct from the cash partners side of things.  You find a cash partner willing to put x amount in for the down payment, then refinance the property within 6 months and pull the equity/down payment out to repay the cash partner plus giving them 15% on top of the money they invested with you.  So, this gives the cash partner a 15% return on their money within 6 months and if they are willing to, this allows them to reinvest with you over and over again for another 15% return on their money.  Sounds like a pretty good deal to me.  

When you structure the deal with the cash partner, do you execute a promissory note via an attorney, stating that they will get 15% on their money within 6 months and if not they have the right to foreclose on the property?  And how does it work to refinance the cash partners money back out, don't banks only allow up to a certain percentage to be taken out on a cash-out refinance? 

That's probably enough questions for now.  Again, thank you for taking the time to go into more detail on my questions.  I look forward to hearing more!

Duane

Hi BPers,

I asked a few of my coworkers if they would consider partnering with me on the purchase of another rental. I have a couple people who are interested and would consider putting down payment money in. My question is, what would be the best way to structure the partnership? I suppose it depends on how much they want to be involved, whether its just a setting up a promissory note and they get a return on their down payment money or if they want to go in on everything 50/50. I would like to show these potential investors an example of what each of these scenarios would look like on paper. Do you know of a way I could do this or could you point me in a direction to gather this information? Thank you BPers, I appreciate your time and expertise.

Thank you @Travis Sperr. I live in south Longmont, so the meeting in Louisville would be an easy one for me to get to. I appreciate the info. 

Hi @Ben Cochran 

Thank you for the info, the Pine Financial meeting sounds like a good bet and who doesn't like a cold one.  Schedule permitting, hopefully Ill see you at the next meeting. Thanks again for the info.