Posted by bradley on April 08, 2002 at 11:15:42:
so sorry i really didn’t know were to post. the place i am referring to i called a sfh but it is a mh 3 brm with a huge addition and a 2car garage. banks won’t go above 65 with land but i wanted to cut a little off to upgrade and do lonnie deals on. what i was really tring to find out about were tax concequences and forclosure problems.
Lonnie Deals and Selling the Notes - Posted by Jeff Johnson (NY)
Posted by Jeff Johnson (NY) on April 06, 2002 at 06:57:21:
I am a newbie just starting out in this business. I fall into the category of having a small amount of cash on hand to invest. I don’t know of any personal friends or investors that would be willing to buy my note, either front end or partial. Suppose I use my credit card as the “would be” investor that is buying my note for 18% return. I do have a very large credit limit I can work with, is there any difference using the card and paying it back, versus finding a real investor and paying him 18% yield? Thanks guys for helping me out, I can’t wait to be able to post my first success story on this site!
Re: Lonnie Deals and Selling the Notes - Posted by Jerry Freeman
Posted by Jerry Freeman on April 06, 2002 at 07:47:16:
Well, there is a difference between using your credit card at 18% and selling your note. You won’t be likely to find a buyer for your note at 18%, so your yield will be better with the credit card. If you pay your credit card bills, your credit will improve, and you’ll likely get more credit to work with. If you use a MH financing broker to get outside financing whenever you can find a buyer who qualifies, you may be able to get cash out of some of your deals to keep from exhausting your consumer credit lines.
Best wishes,
Jerry
P.S. Where are you in New York?
18% - Posted by Chuck
Posted by Chuck on April 06, 2002 at 11:57:40:
Check that credit card… that’s 18% compounded when, how often?
Yep, that’s 18% that YOUR paying someone else to use your own money (line of credit).
Sounds abit backwards to me.
OK, Chuck … It’s time to put up or shut up. - Posted by Jerry Freeman
Posted by Jerry Freeman on April 06, 2002 at 12:13:42:
Here’s a challenge for you, Chuck.
Show us where we can get money for better than 18% to work Lonnie deals. Not hypothetical “call everyone you know…” suggestions. Show me the money!!!
If you can direct us to real-life, accessible sources that actually produce the money, that would be a great help. Otherwise, paying 18% to get cash for deals where I can take a 100% yield looks pretty good to me.
(Granted, many people find private investors who will loan them working capital, but there are also many who don’t have such connections, especially at first before establishing a track record to show private lenders.)
Best wishes,
Jerry
P.S. Nowadays, it’s usually possible to call the credit card companies and ask for a better interest rate. It’s not hard to get 14.9% or even less. Many Lonnie-type dealers charge 14% or 15% interest, so there’s no reason not to just charge your buyers the same interest as the credit card company is charging for the money that went into the deal. I can’t see any downside to that whatever, unless I can find money for even lower interest or do lots of all-cash deals fast.
So your saying that you lack ambition? - Posted by Chuck
Posted by Chuck on April 06, 2002 at 12:28:35:
90% of the people that I’ve run into over the course of my business career have little to no clue how to get to where they really want to be.
They stumble around for several years trying to duplicate what someone else did, or trying find their own way.
If you want to pay 18% on money you borrowed, go ahead… I didn’t and won’t.
As to your “challenge”… if I could get you as much working capital as you want and do it for less than 18% would you take it?
I’ve got financial sources that would fill a small notebook… everything from a fast hard money lender, to a mortgage broker, to corporate investors, to a bank in Texas that two-steps with me on a regular basis… government programs, SBA loans, etc, etc.
People who say they can’t get money, are usually those who’s credit is so screwed up that they couldn’t borrow a quarter for the payhone to call someone who cares.
That or they just ain’t looking in the right place.
Re: So your saying that you lack ambition? - Posted by samantha
Posted by samantha on April 06, 2002 at 14:12:45:
now, now chuck…take a deep breath! Most of the people you refer to as not knowing how to get where they want to be, don’t know where they are NOW, not a clue as to where they want to be and not knowing the starting point OR the destination makes it jolly well impossible to figure out a path to connect the two dots. The rest of the world is filled with loons…we have agreed on that already. It is the folks who are TRYING but don’t know how to take the first (or second or third or fourth) step that we are addressing here on this forum. Give Jerry a break! He may not know what to do but he is smart enough to SAY he does not know…and wise enough to ask someone who does know. That is where YOU come in to share your wisdom, your experience and your financial resources with the rest of us bumbling fools who have not yet attained your lofty perch…but we are all coming on fast, with help from folks like you.
Correction, that’s jerry@tcenet.net (nt) - Posted by Jerry Freeman
Posted by Jerry Freeman on April 06, 2002 at 12:33:58:
.
Read my posts … - Posted by Jerry Freeman
Posted by Jerry Freeman on April 06, 2002 at 12:32:37:
… if you have any doubts about my ambition. Now I would like to talk to you privately about your sources of financing at better than 18%. Would you mind emailing me your phone number? jerry@tcente.net.
Best wishes,
Jerry
Enjoyed this one… - Posted by Jacque - WA
Posted by Jacque - WA on April 07, 2002 at 14:51:08:
Keep up the good work Samantha…
Jacque - WA
You missed the point… - Posted by Chuck
Posted by Chuck on April 06, 2002 at 19:57:38:
Too many on this forum automaticaly assume that because I “rant”, that I’m upset.
I’m not in the least… in actually, I’m just trying to motivate some of the more sensitive types to get off their collective duffs.
By the way… I did e-mail Jerry info on a hard money lender, and he wrote a rather nice reply for meeting his “public challenge”.
Doc hit the nail I was driving at… don’t dig yourself deeper into (daily compounded) credit card debt… there are alot more sensible ways to get the funds you need.
All ya gotta do is ask.
Atta-girl Samamtha you tell’em. Lets… - Posted by Dr. Craig Whisler CA
Posted by Dr. Craig Whisler CA on April 06, 2002 at 16:51:45:
…you and him fight. :~)
My .02 worth.
I have a friend who has great credit and he would rather juggle credit cards than do honest work :~). He is very good at it. He generally starts with a special low interest credit card offer for the first 6 months at about 3-5% interest. After 6 months he just gets a new card with similar rates and transfers all card blances with higher rates to the new lower one. It seems like he never has to pay the high (18%) rates you guys (and girl) are talking about. I no longer sell my high yield notes. If I want a quick UNSECURED 15% loan from him I just phone him and the next day he shows up with $5k-$15k in cash. Free delivery. He knows I always pay. He doesn’t have to work but I do. I sometimes wonder if I’m in te wrong business.
I’d like to point out one more thing to folks who want to use credit cards this way. There is one OVERRIDING consideration besides the high interest rate, that I’ve never heard anyone mention. It is the high monthly payments per $100 borrowed that can be the real problem. DON’T use credit cards for low profit deals or for long term financing like you would normally use on single family houses. You can get away with playing the high interest rate credit card game on mobile home notes because they ALSO have a similarly high monthly payment per each $100 borrowed. It is because mobile home loans are also of short duration (such as 30 months or so average) that makes them so viable for mobiles but not for SFRs or long term loans. The Lonnie type mobile home loans yield 50%-%100 or more and can easily support credit card monthly payments while a typical sfr can’t because of a very much lower yield (say 8%–12%)and the generally long repayment periods (15-30 years). Because business use interest is tax deductible the EFFECTIVE rate is usually about 1/3 lower than the face rate anyway. Therefore if you start out with a 5% teaser rate card your effectibve rate for that first 6 months may only be 3%-4% interest. That sounds pretty good to me for unsecured, Quick, and easy loans.
In summary it is generally OK to use credit cards to finance LONNIE deals but not SFRs.
Regards, doc
Re: Read my posts … - Posted by Jeff J
Posted by Jeff J on April 07, 2002 at 10:59:14:
Thanks Jerry, Your advice has been great! I know private investors are probably a better avenue in the long run, but in order to get started I need to use resources available to me. If you have any other resources or info on brokers or private investors, feel free to email them my way. I would greatly appreciate it!
P.S. I am in the Central NY region.
Re: Atta-girl Samamtha you tell’em. Lets… - Posted by samantha
Posted by samantha on April 06, 2002 at 17:45:53:
Now, Doc! Fighting is not my forte…let there be peace on earth, let it begin with ME. Anyway, I have no beef with Chuck…I LIKE him. He has lots of good advice, tons of knowledge and clearly knows practically everyone on the planet that is worth knowing. He just has a lot of ENERGY and sometimes it is fired at a nonworthy opponent. Jerry did not deserve the attack…and Chuck did not MEAN to attack. I’m sure of it. I think Chuck should write a book…all that knowledge and energy and no way to dispell it…I have a Master’s in Marketing and Communication, I would love to help him market it…as for that anger…I don’t know if I should offer to find him a woman or just get him a dog…which would be most beneficial to him, do you think?
Your gonna find me a woman or a dog? - Posted by Chuck
Posted by Chuck on April 06, 2002 at 19:55:10:
I’m not quite sure how to take that.
Actually, I just went thru a divorce (starting to date again) and I already have a great dog… but I’ll keep the offer in mind if the well ever runs dry.
Sometimes you kill me girl.
A short story about a red neck and his dog… - Posted by Dr. Craig Whisler CA
Posted by Dr. Craig Whisler CA on April 11, 2002 at 01:54:26:
…they lived in a mobile home of course.
Its about the kind of a guy who drives a old pick up truck. You know the kind with the rifle rack in the back window. His dog sits right beside him where it belongs. The misses rides in the back, where she belongs. Kinda reminded me of you Chuck, when I read about you and your dog.
OK now Jacque and Mother Earth (Samantha), give it your best shots, but be nice.
Best Wishes, doc
stick with the dog… - Posted by BRADLEY HAWLEY
Posted by BRADLEY HAWLEY on April 06, 2002 at 20:35:01:
eventually it may bite or mess up the rug but if you put it out for the night its happy to get in in the morning…enough b.s. is there a down side to owner finance or do i give out a good enough l/o to get the bank not to care about the debt and concider it income, im having a slow start and see a good chance to owner finance a sfh i am picking up but don’t really know the down side. they have enough to put down to buy out my interest so the monthly payments will cover the morgage and give me about 200 positive. what i am thinking is to take the option money, give him the option, take the depreciation for 10 years and sell it to him for about 1500 at the end. what am i overlooking.
Re: A short story about a red neck and his dog… - Posted by samantha
Posted by samantha on April 11, 2002 at 23:56:03:
Did I MENTION that mother earth has a black belt? There will be no girl bashing here doc…back of the pick up INDEED. And I would not THINK of having a gun that close to MY good ole dog…she might eat it.