| money in this economy for real estate investing |
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Elmira Nancy
Preferred Member
Cash: $ 26.90
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Joined: 01 Dec 2009
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| money in this economy for real estate investing |
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Please don't tell me to apply for a mortgage, I have done it. I'm looking for strategies for acquiring private money. I am in a college town with great profit potential for long term growth through rehab and rentals. I have some savings and credit to offer, but not much.
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Fri Dec 04, 2009 6:10 am |
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coaster
Senior Advisor
Cash: $ 1318.80
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Joined: 11 Oct 2005
Location: Wisconsin
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That kind of a question requires more information about yourself and your situation. Age? Education? Resources? Abilities? Experience? Credentials?
~Tim~
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Fri Dec 04, 2009 6:45 am |
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Newstockslive
Preferred Member
Cash: $ 17.70
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Joined: 12 Sep 2009
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Good question. While its a big problem that banks are not loaning money for projects they are infact beginning to loan money again to home buyers. How many houses (units) you plan to buy will also depend on what you next steps are. Do you have a business plan or are you just looking to capitalize on low house prices?
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Fri Dec 04, 2009 1:26 pm |
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Raptor
Full Member
Cash: $ 14.50
Posts: 70
Joined: 15 Nov 2009
Location: Missouri
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I did that for a few years with a friend. We created a partnership; I got lucky, as there were never any major issues between us. As for the business, he was very knowledgeable about construction and I'm very knowledgeable about business and had the savings and credit to get things going. You are correct a bank will not loan against such ventures, even when credit was loose. For such risk they will loan 50% to 60% of the appraised value at the time of purchase. You still need funds to do the work. Keep the bank in mind once the house is completed, then you will be able to borrow against the house to close out short term positions that are at much higher rates. My primary credit line was credit cards. I had access to $40k in credit. Between savings and the credit cards we could purchase a rundown house and fix it up. We wanted to rent them so after it was fixed up and ready to rent then we borrowed 50% of the new value and paid off the credit cards. It was onto the next one. I'm no longer involved because the demand of my real job. To rehab a home, you lose your evenings and weekends, because you can't afford to push the finish date out. Credit card interest rates are eating you alive until you can get the job done. Bottom line is that the risk is extremely high and you will have problems getting anyone to loan against such a venture. Try to find a business partner, or family members that believe in your idea to borrow money from. Individuals looking to make more than 1% on their savings, may loan you the money, if you offer 8% to 10% interest in return for the risk they are taking. The down side is that you now would have investors and they will want to see results, not hear excuses. Also you can offer people a note to back the loan; this adds some safety to their investment, since they will be able to come after your assets for years to come if you fail to pay them back. I bought one house where the owner carried the note at 9% interest for 8 years, plus I have perfect credit, no late payments and I never stiffed anyone.
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Fri Dec 04, 2009 10:52 pm |
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Salena Maxine
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Joined: 09 Dec 2009
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Like all great real estate investment stories, you need to solicit folks that have the money to invest with you. Nothing is free so you will need private money. Family, friends, etc. unless you have a proven track record. It would be in your best interest to have a business plan including exit strategy and time lines. The more time you spend on this phase, the more likely you are to convince people that you will succeed and thus their money is safe. You may have to leverage your own credit to SUPPORT this new endeavor. Be prepared to max out a credit card or three.
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Wed Dec 09, 2009 11:24 am |
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C9Consulting
Full Member
Cash: $ 17.65
Posts: 88
Joined: 15 Jan 2010
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You could always look for investors with a common goal. Then you could pool your money together. That's about the easiest way to acquire private money.
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Wed Jun 09, 2010 1:08 am |
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webreal01
New Member
Cash: $ 1.00
Posts: 5
Joined: 24 Jun 2010
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Why you don't try to go in commercial real estate because it is really good in investment for a beginners.
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Thu Jun 24, 2010 1:36 am |
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danielhenry31
New Member
Cash: $ 1.00
Posts: 5
Joined: 09 Jul 2010
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It would be in their interest to have a business plan, including exit strategy and time. Longer used at this stage, the greater the opportunity to reassure people that you will succeed, so the money is safe.
Henrico Virginia real estate
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Fri Jul 09, 2010 7:26 am |
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