There is an area i would like to start buying sfh’s, each selling from the bank for 50-70k on 5000 sq foot lots. I want to rent them out and hold them for 10-15 years because its currently a ghetto but the main street has just been sold to a development company and this area is adjacent to a very high end neighborhood. My main problem is that im in college and dont have much money but the potential is very high. How would you go about finding a wealthy partner or some kind of funding.
if you don’t have experience, start calling relatives, investors want to know you have experience, but grandma might be willing to help
I am not sure which state you are in as it matters how the promissory note will be drawn up. You should have a real estate attorney do this for you. A typical hard money loan will be simple interest only with a rate of around 15% and a balloon payment after 12 months. At least this is what I have seen. I have seen them go higher than 70%, but, you are asking for trouble with these guys as rates are higher. If your friend is willing to do this, the loan will be secured by the property and he will hold title as the lender until the loan has been paid. You may be able to negotiate a lower rate or higher ltv. If I were him, I might just by it myself as we all should by almost any property if we can get it at 70% of the value.