hassansr

Ok, Thursday is my day for finding a couple of private lenders. I'll do this via networking at a couple of real estate investing and business events. Basically I'm just going to run my mouth and let folks know what I do and what I'm looking for. I'll pitch the following deal for funding a property on a flyer like this with an attached photo and appraisal (if some of you more experience investors could take a look at my numbers and the scenario, I would appreciate the feedback): The bold sections are my comments to you. This is where I insert a color photo of the property 2852 QUINBERY CT, SNELLVILLE, GA Estimated After Repair Value (ARV): $135,000 Situation: This is a property that I need funding for. It is a 3 bed, 3 bath, frame home, built in 1985, needing a bunch of mostly cosmetic repairs of about $18k. Market rent is estimated at $1,200 per month. It's a bank owned property that I’ll be closing around January 30, 2009. I expect it to take between 6 to 12 months to resale at full market value (ARV) to an owner occupant buyer. I also have the option of offering it on a lease to own basis to buyers with minor credit issues that can be repaired. Purchase price: $38,900 Est. Repairs needed are as follows: Interior paint 1,500 Exterior paint 2,500 Carpet 2,500 HVAC 3,000 Front & rear deck 2,000 Appliances 1,000 Landscaping 500 Plumbing 1,000 Gutter repairs 1,000 Misc 1,200 Roof repairs 1,000 Flooring 800 Total Est repairs 18,000 ------------------------------------------------------------- I'll let them know that I am seeking funding at either of two levels: Option 1: Private credit partner for a purchase and repair hard money loan for $53,892 which will cover acquisition, rehab and their points. The credit partner will secure the hard money loan and I’ll service the debt with an additional $29,000 that I’ll secure to cover the down payment, costs of marketing, closing costs, misc expenses and holding costs for 12 months (assuming that I don’t have a lease to own buyer paying rent over that period). In return the credit partner will receive an agreed upon fee to be paid in two parts; at closing and when the property is resold. Combined debt structure will be as follows: After Repair Value $135,000 1st Position loan $ 53,892 2nd Position loan $ 29,000 Total Proposed debt $82,892 Combined LTV 61% I let the private credit partner decide how much the deal is worth to them so that we can negotiate an appropriate fee. I also give another option: Option 2: Private lender will fund the deal completely at 60% LTV ($81,000), I’ll manage the entire project, repairs, marketing and resale. In return private lender will receive a 1st position mortgage deed, a certified appraisal, title insurance, property insurance, and a personally backed promissory note with the following terms: 60 month term, 10% interest only accruing payments, minimum guaranteed interest 6 months (if the house sells in less than 6 months a minimum 6 months interest is paid out; if it takes longer than 6 months normal accruing occurs). Target resale price is $135,000 with anticipated 6 – 12 month period for resale to a home buyer securing a third party mortgage loan. Here is the cost flow: Purchase price: 38,900 Repairs Estimated $18,000 Additional funds needed $24,100 Closing costs, Maintenance, marketing and Misc expenses Total funding needed $81,000 I start with 10% interest and work upwards to the max that I'm willing to pay. I never make monthly payments cause that's negative cash flow. If the lender doesn't like either of the two options presented, I bring up 3rd and 4th options or pass. I also give them comps on the property; whats actively for sell on the MLS and what has sold over the past 12 months. This lets them see that the value is there. Active listings and sold properties Active Listings Address ML# List Price Bed Bath Built Status 2971 QUINBERY DR 3698844 $148,000 * 3 3/0 1984 Active 3718 TRENTON DRIVE 3786744 $144,900 3 2/1 1983 Active 2724 Mountberry Drive 3803838 $138,900 4 2/0 1986 Active 3838 TRENTON DR 3807440 $137,000 3 2/1 1986 Active 2717 Mountbery Dr 3831656 $134,900 3 2/1 1986 Active 3698 Trenton Drive 3797339 $120,000 4 2/1 1985 Active Sold Houses Address Date sold Sale Price Bed Bath Built Dist 3822 Holland Dr 9/15/08 $108,000 3 2 1984 0.10 3075 Arden Way 5/30/08 $140,000 4 2 1982 0.35 3768 September Way 4/30/08 $125,000 3 3 1985 0.28 3830 Menloe Way 4/25/08 $140,000 3 2 1984 0.16 3843 Holland Dr 2/18/08 $140,000 3 3 1984 0.13 3692 Holland Dr 1/25/08 $143,000 3 3 1985 0.27 ----------------------- From the 3 networking events I'll be attending I expect to find at least 3 potential private lenders / partners. I'll let you know in the next edition how that works out. In the mean time I still need to finish viewing properties and start making offers. Take a few minutes to look at the numbers again, let me know if you're having any issues following this...

So I went out in the afternoon wednesday and took a look at 15 houses. Out of those I eliminated 5 for various reasons like being way too ugly, being on main or unpaved streets or having bad interior layouts. If you're interested in seeing what these look like, PM and I'll send photos. You can also look them up online at any of the realtor sites that are linked to MLS for the Atlanta area. Here are a few of the ones that I eliminated: 3440 centerville rosebud road, snellville, ga 30039 (looks like an ugly green double wide) 3103 deshong dr, stone mountain, ga 30087 (under contract) 293 bicentennial drive, stone mountain, ga 30087 (was an expired listing, now occupied) 4437 amy road, snellville ga 30039 (too small and on main road) 8466 donald road, snellville ga 30039 (beautiful home on unpaved road filled with huge potholes) I was able to get into 5 of the ten by calling the listing agent for the lock box code or entering thru already open doors. The remainder I was able to look through the windows to quickly get a feel for the interior. 3 of these houses are in great condition, needing less than $10k in repairs to bring them to retailable condition. Working out deals on these might take awhile, meaning that I might have to work the REO broker awhile to get the prices that I want to buy them for; but I wont let that stop me. 5 houses need between $10k - $15k in repairs, so that'll give me a better shot. The other two will need major repairs above $15k, which gives me more leverage with the banks; one of the two had a squatter living inside. Tomorrow I'll see the remaining houses from the MLS and from my investor contacts. I'll also take a look at 10 of the HUD homes as well. Once I have completed my inspections I'll start crafting my offers based on the math and the situations that I see. In addition to crafting the offers I also need to start seeking private funds. I'll do that by taking the numbers from the best 3 deals and crafting an offering package. I'll be going to 2 real estate networking events tomorrow, so I need to get this done right before I go so that I can pitch them. It doesn't matter if I don't have the house secured yet in this step, all that matters is that I have a potential deal with the returns that a private lender would expect. Once I have an interested lender that can perform quickly, I can find the best deal for them. In the morning (or later tonight) I'll show the math and private loan offers and how they work. Til then...

Ok. Looking at the list of properties on the MLS, Craigslist and from other investors I have cut the list of potential candidates down to about 33. I did this by looking at the asking prices and who the owners are. If the asking prices were higher than 90k I dropped them (what's the point if they aren't close to where I need them to be now?); also if the property owners are regular people then I dropped them as well, as the debt that they owed was higher than the amount I was willing to pay for the houses. One last thing, I also dropped houses in areas that I don't like or don't want to travel to, like Buford or Sugar Hill, GA. I have never bought or sold any houses out in those areas and neither do I know much about those areas; that being the case they had to go. From the remaining properties I went to the MLS to view photos of the properties and to get some details on what I am working with. 3 of the properties were so ugly that even Ron Legrand wouldn't touch them (badly designed), 2 others were listed as pending sale; I'll monitior their statuses. From the remaining properties I printed out the MLS listing pages and the tax records from the county tax assessors websites for review. From the HUD properties list I did the same steps and have come up with about 10 that will be of interest. My next steps are to go out today to take photos, to inspect the properties for repairs and to see if I like the neighborhoods (don't want houses in areas that homebuyers wouldn't feel comfortable in). In that regards I'm looking to make sure that the repairs are no more than $15k, that the houses don't have a weird feel to them, that the neighborhoods are not in obviously high crime areas and that the properties are not located on any main roads or near industrial areas. Here are just a few of the ones that I'll be looking at: 3440 centerville rosebud road, snellville, ga 30039 3103 deshong dr, stone mountain, ga 30087 293 bicentennial drive, stone mountain, ga 30087 Before I leave of course, I have to plan my route with mapquest or google maps. I'll let you know later today how this works out and what I saw. I'll also discuss how I'm going to find some private lenders. Til next time, have a great day...

Hey, I learned something new today, HUD has issues! It requires the buyer to jump thru a bunch of hoops just to make an offer on a property (BTW, I have never made a HUD purchase). That said I will have to register on their site with pemco, fill out a bunch of forms and disclosures and have a licensed realtor submit my offer for me for each of the houses I am interested in. Those forms include: 1. HUD's contract submission checklist 2. HUD's sales contract (form HUD-9548) 3. The electronic filing of HUD-9548 contract addendum 4. Radon gas and mold notice and release agreement (HUD form-6548-E) 5. Addendum to sales contract for owner occupant (if I was to buy as one, which I'm not) 6. Earnest money certification 7. Pre-qualification letter 8. Forfeiture and extension policy You know, this is why I prefer to work with private sellers; a lot less paper work and drama. Anyway, once I figure out which houses I'm going to bid on, I'll fill out all these forms and submit everything through one the beautiful realtor I work with. I'll let ya know how that goes later.. til then.. p.s for anyone that has dealt with HUD property bids, please give me your thoughts on how to make this go smoothly.

Ok, I did the math and it looks something like this: In my little corner of the Atlanta market a good number of the middle class home buyers want and can qualify for homes in the $100 - $200k range, which for the most part are your garden variety, modern 3-5 bedroom room homes with 2 -3 baths, less than 1/4 an acre and a two car garage. That being the case I'll target houses in the mid-range of that, about $150k in value after all the repairs are done (ARV). From that amount i want to subtract all my costs to get my desired purchase price, which includes repairs, closing costs, early profits, marketing expenses, holding expenses and or interest. As I mentioned in the last post, I only want to do cosmetic to moderate repairs on a house, so the max I'll put into repairs is $15K Closing costs will run me about $1,500 I aways give myself a guaranteed bit of profits early of at least $10k. Marketing expense is the one item that most investors screw up on (besides repairs). That being the case we have to factor that in as well. When reselling I always plan for the process to take at least 6 months using a combination of ads ($250 a month x 6 = $1,500), signs (15 per week x $4 each sign x 26 weeks = $1,560), direct mail (500 post cards a month to renters x .31 cents per card x 6 months = $930) and a flat fee listing on the realtors' multiple listing service (MLS) at $400. Total cost of six months of marketing to sell a house estimated at $4,390 Misc. expense cause things always pop up that you didn't anticipate My numbers for a $150k house will look like this: ARV $150,000 X 60% = 90,000 (search the forum as to why people use 60%-65%) Less project costs: Rehab = $15,000 Closing cost = $1,500 Early profit = $10,000 Marketing = $4,390 Misc = $3,000 Total Costs = $33,890 MAX Allowable Offer pay for the house (Gross MAO) = $90,000-$33,890= $56,110 I plan on using a private lender to fund this so I'll have to factor in my interest expense. Lets assume that it'll be 12% annualized based on the 60% of the ARV ($90k x 12% =$10,800). Subtract the interest expense from the MAO to get the net MAO ($56,110-10,800=$45,310). Again the net MAO is the max I'm willing to pay for the house; that being the case I can't pay the MAO. So I'll multiply the net MAO by 85% to get my starting point for making offers ($45,310 x 85%=$38,514). BTW, just in case you're wondering, the difference between the 60% of the ARV and the ARV will be used to cover the expenses of closing out the deal once I have found a qualified buyer. Those expenses include realtor expenses (in the case where the BUYER is brought by a realtor), Closing costs and other concessions to the buyer (such as decorator allowances or fixing the stupid stuff their home inspector finds to scare them with). It also includes the cushion that i have for lowering my sales price to account for the fact that some buyers may not qualify for a $150k purchase, but may for lets say a $135k one. Anything left over after all of those costs are covered are considered "gravy" on top of my early profit of $10k that I already took. Now that I know my numbers, all i need to do now is to go out and find some deals. In todays market it's going to be really hard finding private sellers with that much equity, so I'll have to deal with bank owned properties, HUD and VA homes, probates and other investors. So we'll look at MLS, REO realtor sites, HUD's website, other wholesalers websites and do a little networking. I'll show how that works tomorrow. In the mean time I got to start working on finding a couple of potential private lenders (cash or credit). Please let me know if anything i mentioned so far was unclear.

thanks. It'll also get me back into the seeking private funds game (took too long a break from it)

The other day I was asked to show a friend all the steps required to find and buy a fixer upper house here in the Atlanta market. Not a hard task, but doing it the right way is. That said I decided to keep a little log of how things are going with the process. So if any of you are interested please follow along throughout the month as I make this thing work. Give me you thoughts if anything that I do doesn't make sense to ya. If any body else out there wants to run a parallel track in your market please do so everyone can see how well this works in different areas of the country. That said, Here goes nothing.... In addition to the wholesale deals that I provide to other investors, from time to time I actually do buy, repair and flip houses. Here in the Atlanta market I prefer to buy houses no more than 35 years old in the north and eastern suburbs, such as Lawrenceville, Snellville, Lithonia and Stone Mountain, GA. The reason that I do this is because in these areas the values tend to be reasonable stable, and the homes are modern with the basic amenities that home buyers (not renters) expect to see. So for the purpose of this exercise I'll be looking for 3 - 5 bedroom homes with a minimum 2 full bathrooms and at least 1,200 square feet of livable space. I'm not too concerned on whether or not it has a basement, nor am I concerned with the size of the yard. I'm just looking for a deal that feels good to me. On more thing, I don't want to do too much work in the way of rehab, so we'll try to keep the repairs under $20k, which will basically be a house with cosmetic to cosmetic repairs. My goal for this property is to be able to flip it within 3 to 8 months and to make a profit of at least $25,000 from the deal. I'll use a private lender to fund the deal, paying out somewhere between 10 - 15% in interest to the private lender or I'll partner with another investor with a profit sharing split. I'll find a private lender by calling list of contacts, networking and hitting up prior lenders. I'll start by looking for properties on the MLS, on other investors websites, on craigslist, and by networking at the local real estate investor associations (REIA's) here in Atlanta, those being the Georgia Real Estate Investors Association, North Metro Reia, and IRCA-Atlanta. Hopefully I'll be able to find about 10 good candidates to look at so that I can get 5 to make offers on, so that I can close on the one I like. This house should have an after repaired value of between $100k to $180k and I'm going to have to get it cheap; about 30 - 40 cents on the dollar (ARV). I'll have one of my contractors inspect it and one of my appraisers confirm the after repair value. Stay tuned to see how this goes....

interesting

FOR MORE INFO PLEASE VISIT WWW.TBDINVESTING.COM OR CALL HASSAN AT 678.348.1949 EXT 0 ADDRESS Bedx bath Price Repairs Est Value Equity 1367 Graymont Dr, Atlanta, Ga 3x1 37k 8k 130k 84k 3412 Jackson Dr, Decatur, Ga 2x1 55k 5k 115k 54k 1443 Janmar Dr, Decatur, Ga 3x2 58k 20k 130k 51k 553 Glendale Rd, Scottdale, Ga 3x2 67k 8k 140k 64k 386 Pennybrook Dr, Stone Mountain, Ga 3x1 58k 10k 120k 51k 3513 Lynview Ct, Decatur, Ga 4X2 73k 10k 130k 46k 194 Racine St, Atlanta , Ga 3x1 31k 7k 90k 51k 1964 Tiger Flowers , Atlanta, Ga 2x1 33k 4k 90k 52k 285 Pointer Court , Atlanta, Ga 3x1 56k 4k 80k 19k 4738 Edwina Dr, Atlanta, Ga 3x2 48k 5k 80k 26k 6445 Emerold Point Cir, College Park, Ga 3x2 86k 4k 150k 59k 750 Jones Ave, Atlanta, Ga 2x1 30k 4k 90k 55k 859 Wood St , Atlanta, Ga 3x1 35k 5k 75k 34k 865 Macdaniel St, Atlanta, Ga 3x1 38k 8k 115k 68k 989 Peeple St, Atlanta, Ga 3x2 53k 15k 150k 81k FOR MORE INFO AND PHOTOS PLEASE VISIT WWW.TBDINVESTING.COM OR CALL HASSAN AT 678.348.1949 EXT 0

BTW, Equity Trust has fees that are ridiculously high. I placed some funds with them last year that I never got around to using. At the end of the year their fees had chewed up quite a bit of it. Any of you guys know of a better place to place SD IRA dollars that doesn't have excessive fees?

H Omar, I will be launching a new website on the 15th that will have free private lending tutorials. www.thefrustratedinvestor.com I am a private lender and IRA investor with lots of information that has been put into these tutorials on these subjects. MC has influenced several of these tutorials as well with lease options and cooperative assignments. Sign up on the form and you'll get email confirmation when the site is up and running. Regards, Adam I've been using private lenders for a couple of years. What new info will you be providing?

Who do you know (besides alan cowgill and john ulmer) that has a good private lending programs that are updated for today's market?

I'm setting my education goals for next year and am looking to add some new speakers to my mix. Is there anyone new out there that any of you would reccommend?

Sometimes silence is best. The effects of her comments will pass and you'll start getting responses again

I always give my self at least 90 days on an option. The rest is marketing

In the Atlanta market, what seems to be working is wholesaling to cash buyers. The hard part about it is the fact that most cash buyers have a good understanding of how the biz works and how to find deals. This fact is causing me to focus a lot more than usual on developing closer relationships with potential buyers and focus on reaching out to many more of them to get just one. I don't spend nearly as much on marketing to sellers as I use to, but spend more time finding deals via networking. I am also using options more than ever. How have you guys (and gals) that are wholesaling been able to successfully been able to adjust to the changes in the market? What methods and techniques have been working for you this year?

New! 369 Joseph Lowery Blvd NW, Atlanta, GA 30310, Price $75k repairs $20k, ARV $215k 3624 SQFT, 5 bed 2 bath, will make great rooming house for students or homeowner property. view photos www.tbdinvesting.com Repairs Needed Interior Paint Appliances Bathroom package Install HVAC Compressor Flooring Landscape view photos www.tbdinvesting.com flips@tbdinvesting.com

194 Anderson Ave, Atlanta, GA 30314, Price $41k repairs $10k, ARV $100k 2 bed 1 bath sgl family home, 850 SQFT. Needs minor repairs. Make an offer. view photos www.tbdinvesting.com Repairs Needed Touch Up Interior Paint Interior Cleaning Landscape Minor carpentry Appliances Kitchen fixtures HVAC Water Heaters Bath fixtures, A couple of Doors and windows Misc Items view photos www.tbdinvesting.com flips@tbdinvesting.com

NEW SHORTSALE! 3523 Old Duckett Mill Road, Gainesville, GA 30506, Price $410k repairs $20k, ARV $680k 2,771 SQFT, 4 bed 3 bath sgl family home with direct access to docks of Lake Lanier. Needs minor repairs. view photos at www.tbdinvesting.com email flips@tbdinvesting.com Repairs Needed Mostly Cosmetic. Click Here to download www.tbdinvesting.com/duckett_repairs.pdf Comparable Sales Address Sale Price Date 3738 Ronny Way $700,000 May 2008 3450 Banks Mountain Pl $650,000 April 2008 3685 Cameron Circle $700,000 Aug 2007 view photos at www.tbdinvesting.com email flips@tbdinvesting.com

1828 BRAEBURN CIRCLE, Atlanta, GA 30316, Price $45k, New Construction $125k, ARV $300k Great East Atlanta Location. Lot dimensions 40 X 40 X 200 X 200. Includes FREE 780 SQFT existing structure to be torn down. New Construction on street valued from $250k - $350k. Repairs: Tear down existing house and rebuild $125k photos online at www.tbdinvesting.com Comparable Sales and Active Listings Status Address Bed/Bath Date Sold Price Sold 1637 BRAEBURN DRIVE 5_3 Jul-07 351,000 Sold 1816 Braeburn Circle 5_3 Jul-07 350,000 Sold 2005 BRAEBURN CIRCLE 3_3 Sep-07 250,000 ACTIVE LISTINGS Status Address Bed/Bath Price Active 1636 BRAEBURN DRIVE 3_2 248,900 Active 1848 BRAEBURN CIRCLE 4_2 339,900 photos online at www.tbdinvesting.com email flips@tbdinvesting.com

yes what did cowgill do? first I heard was from this discussion

What product or service are you trying to get listed?

True, Alan does rehash a lot of stuff. However it is a good starting point for finding private funds. I dont advertise either, but do make others aware of what I do. Doing that I have been able to get all of the properties that I have and am holding for resale funded using private funds over the past 3 years.

Have you been successful in raising private money using Alan Cowgill's info? I have been.

I use the same model with subject to's. A good private money course to buy is Alan Cowgill's. If I were you, I wouldn't get into using private lenders until I had bought and sold at least five properties, as you will be risking another persons money.