OfflineHi, I am a total newbie. All I have done is watch The Edge 2011.
Their are a few things I picked up but need to understand better.
First - If I have a good deal on a house and approach a private lender. Lets say I need $50 000 and I show him its a good deal. He gives me the money and i buy the house. Now lets say i want to buy, fix and hold.
Who owns the property? Me or him? If I own it and he just lends me the money how and when do I pay him back?
If someone can give me a few examples with numbers that will be great as I work better with practical cases.
Thanks
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Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
HI, a quick overview on getting private capital. First, private lenders/investors take generally two paths..debt (making you a loan) or equity (they become a partner). Debt funding carries an interest rate of whatever you can agree on. Seasoned private lenders are usually called Hard Money Lenders and charge 3-5 points up front plus 10-16% per annun on the rate, with monthly interest-only payments due and then the loan must be paid off within 6-12 mos usually..so only good for a fix and flip senario.
Equity investors are generally partners who get either a minimum return (before you get anything) or a split of the profits, or both. This type of money is in essence your "down payment" or can be all cash. Their investment with you is behind the debt lenders above. These investors might go for a longer term hold program where you want to hold it for several years. They will usually want the control however if they put up most of all of the cash required. Usually you both are on title or better yet both of you own a part of the owning entity.
GOOD LUCK
you may want to fill out some info on your profile on your account so that other investors here can know a little about yourself and where you are from so they can network with you...
Private money: you find someone that is willing to loan you the money; you both agree on a term and rate of the loan. You can refinance the property and pull out the cash to pay back your private lender.
wishing you success,
Valerie
“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss
"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown
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i am unsure about how to know if you have a good deal or not. Here it is: single family 5/2 1/2 asking 199,900 Zillow est. 298,300 . 2660 sqf short sale. Area commands at least 2500 rent. mortage is 735. median is 246,550 avg 233,150. Is this a good deal and if not why? plz help the newbie learn how to read the numbers
and that is to fill out your bio, so others can network with you. You will get better responses that way.
www.tw4homes.com website
https://tvallc.isrefer.com/go/RehabLite/reigirl/ FREE SOFTWARE FOR WHOLESALERS, REHABBERS AND AGENTS! Present professional looking deals to buyers and lenders as well as run your numbers and get the ROI.
That is a pretty extensive thread! I remember it to this day!
Happy investing!
It is CERTAIN we will SUCCEED!!!
Paulma, above, has given you a good explanation of private lenders. I agree with everything he has told you.
That said, I believe that you are jumping the gun. As a "newbie" you don't need to worry about buying houses for your own portfolio at this time. It is natural to think about buying house because you can't make money until you have a good deal to sell. But conversely, if you found the best deal ever tomorrow, you won't make a nickel unless you have a way to close it. So, unless you have some deep pockets, you need to find investors.
Your first several deals will probably either be bird dog finder's fees, and/or assignments. Once you have done several and have cash in the bank, then you can think about buying for your own portfolio.
Keep focusing on building your Buyer's List.
Good luck