Posted by John B. Corey Jr. on August 29, 2005 at 13:49:27:
Scott,
Having a job is good when applying for a loan. Hence if you wanted to do RE full time it might make sense to work a shift job that is easy to deal with but helps on paper (and increases cash flow). Something stable with a W-2.
That said you can finance deals that are low LTV with hard money. It is expensive but almost always less then getting a partner to secure the cash and financing.
If the deals are truly discounted like you have indicated you might get a local bank to extend a line of credit. These take time to build up so start early and treat the banker well (no surprises, pay early, let them make some money, keep them updated, only clean deals funded by the bank).
You can use a cash partner if you like. Splits the profits. You suffer from a lack of control and you lose more of the profits then if you used hard money. For some deals a partner is best as they can finance the property.
If you get cashed out from your business keep the cash liquid and that will help with loans from a local bank. If you end up taking back a note you might get a little credit from the lender as it will show an income stream.
John Corey
Chelsea Private Equity LLC