We apologize, but the forums are closed for new posts. Click Here To Join The Unemployables Facebook Group

Welcome, Guest. Please login or register.
December 01, 2022, 06:49:51 am
Home Help Search Calendar Login Register

Welcome, Guest. Please login or register.
December 01, 2022, 06:49:51 am
Home Help Search Calendar Login Register

Author Topic: Real Estate Investing using *less* of your own money  (Read 3711 times)

Offline rookieNYC

  • Member
  • *****
  • Posts: 1000
Real Estate Investing using *less* of your own money
« on: October 27, 2010, 08:51:43 pm »
I have been inundated with various *ambitious* new investors looking to get started with *zero* of their own money...As the experienced RE investors know in this current financial climate it is *near* impossible to get started with no skin in the game...I constantly hear how lenders should feel lucky that they are approached with an offer to lend on ARV (essentially lending way over %100 of purchase price)...What these new investors dont realize is that there are tons of deals and or offers to buy deeply discounted properties and it doesnt take much effort to find these deals nowadays..Even today I was having  lunch with a HML friend of mine and he told me how he was approached with this idiotic deal..A woman calls him up and says she wants to buy a duplex...100k(purchase price) and needs 30k in rehab work (she goes on to say that it will be worth 200k after rehab is completed)...Then in the next breath she says she wants to borrow 130k @ %12 and *no* points...LOL..So my friend asks what is your additional free and clear collateral to put up in replace of your lack of equity/money/skin in this deal...She becomes irate...She proceeds to say that she has never had to put up any collateral in the *past*..And how lucky my friend is to be making %12 on his hard earned money..And how he is the the fortunate recipient of her brilliant RE deal and will hold a coveted first position lien on her gamble..WOW TY....My friend quickly and correctly responds so why arent you dealing with your old HML....She responds well they dont do this kind of loan anymore...LOL...Is it me or is this lady dense...

A lesson to new and *underfunded* investors....

1. Find a partner who has *capital*...
2. Start wholesaling/bird dogging deals to build up your *own* capital....
3. Don't assume lenders are morons..They see more deals than you could ever imagine...
4. Stop asking to borrow on ARV....There are *almost NO* HML's or banks doing this anymore if any....
5. Overlending on properties is why this country's RE market is in such bad shape...
6. If you have zero cross collateral,zero experience,zero capital would you lend to you???????....


Sorry for the rant,I just can't take this mentality anymore..
« Last Edit: October 27, 2010, 08:59:59 pm by rookieNYC »

Offline lauraalamery

  • Member
  • ***
  • Posts: 154
    • Step by Step Real Estate Education and Personal Coaching at a Very Affordable Rates
Re: Real Estate Investing using *less* of your own money
« Reply #1 on: October 30, 2010, 04:26:42 pm »
I agree. I think the best way to start investing with the least money down nowadays is to find a partner or a private money lender, who will take the property as collateral. You will be surprised how many private money lenders are out there, especially if the investment is short term or a flip deal. If you keep the property for a year or more, you can eventually refinance it and get the investor off the title.
How do you find these private investors? Contact real estate agents that deal with investors, they know cash investors. Have an agent run an MLS search for cash buyers in the last 6 months for the area where the property is at and ask the investor if they want to partner on a deal. Check your recorder of deeds office for cash buyers, who have purchased properties recently.
Don't use credit cards, line of credit, etc. You will get in trouble fast, especially in this economy. Keeping a source of reserves available (cash or credit)is always the best practice.
Laura Al-Amery is a seasoned real estate investor. Please visit www.lauraalamery.com for Free Training Webinars, Articles and Complimentary Coaching Consultation.

Offline rookieNYC

  • Member
  • *****
  • Posts: 1000
Re: Real Estate Investing using *less* of your own money
« Reply #2 on: October 31, 2010, 07:15:05 pm »
The problem I notice is that *most* of these no capital to invest people are newbies to the RE investing business..It takes brass to expect to go into any business with zero experience and expect to do it with none of your own capital...Then these people become irate when you explain that it cant be done.. :banghead

Offline eric3

  • Member
  • ***
  • Posts: 216
    • NorthSide Funding
Re: Real Estate Investing using *less* of your own money
« Reply #3 on: November 02, 2010, 12:21:50 pm »
Then these people become irate when you explain that it cant be done.. :banghead

Cause they saw on a late night infomercial that it could be done.  That is what they choose to believe.  Even when an experienced lender tries to explain that it isn't going to happen.

www.NorthSideFunding.com.  Nationwide Transactional Lending and Chicago-area Hard Money Lending.

Offline rookieNYC

  • Member
  • *****
  • Posts: 1000
Re: Real Estate Investing using *less* of your own money
« Reply #4 on: November 02, 2010, 01:27:58 pm »
Eric,
 As you know I do HML,I hold regular mortgages,do business lending etc..All *very* collateralized...I did an evaluation of all the loans I have done over a 3 year span...The only loans that gave me any real problem were the ones with the lowest % of skin in the game from the borrower..Not that its any surprise,but when the borrower had significant equity/money/skin to lose (of their own) they *always* found a way to pay off of the loan...Give these people a way to stick it to you and they will..Thats why I rail against ARV lending...Its the new/old %100+ financing..

Offline jameshackins

  • Member
  • *
  • Posts: 3
Re: Real Estate Investing using *less* of your own money
« Reply #5 on: November 04, 2010, 01:23:47 pm »
Real Estate investing involves the purchase, ownership, management, rental or sale of real estate for profit. The main advantage is having invested in low cost estate can bring you more profit in the future. If you invest first time in Real Estate with your own money than you must investing lee of your own money in real estate. 

Offline Mdhaas

  • Global Moderator
  • Member
  • *****
  • Posts: 2570
Re: Real Estate Investing using *less* of your own money
« Reply #6 on: November 04, 2010, 01:47:44 pm »
Quote
Real Estate investing involves the purchase, ownership, management, rental or sale of real estate for profit. The main advantage is having invested in low cost estate can bring you more profit in the future. If you invest first time in Real Estate with your own money than you must investing lee of your own money in real estate.

REALLY?  :rolleyes
If at first you don't succeed.....................skydiving is not for you

Offline kdhastedt

  • Member
  • *****
  • Posts: 5807
Re: Real Estate Investing using *less* of your own money
« Reply #7 on: November 17, 2010, 06:35:54 am »
Quote
Real Estate investing involves the purchase, ownership, management, rental or sale of real estate for profit. The main advantage is having invested in low cost estate can bring you more profit in the future. If you invest first time in Real Estate with your own money than you must investing lee of your own money in real estate.

REALLY?  :rolleyes

Just a fount of knowledge...
I have CDO...it's like OCD but in alphabetical order - the way it should be!

 




SMF 2.0.15 | SMF © 2017, Simple Machines