Posted by Marko Rubel on July 20, 2011 at 09:54:01:
Heidi,
Keep learning… being a lender is and making money as banks
do is one of my favorite ways to make money… for example,
you create a “wrap” financing that helps a buyer with less then
perfect credit get into homeownership - you helped a buyer,
and got paid well for it:
collected 10% down payment
cash flow based on the interest rate spread
back end based on the difference in price that you paid and
sold for
This scenario usually doubles or triples the profit on a deal,
comparing to an outright sale.
If they default, you take it back and make even more money!
Being the lender – the way to go!
I also agree with Ari (previous reply) - if you deal w tenants,
then delegate it.
I am new to this site. I am excited to learn from others. As a real estate investor and having bought a few houses at the height of the market and losing them all I have learned a lot. I have discovered a more interesting way to benefit from the real estate market. I recently learned how I can be on the other side of the deal, carrying the note. That way I don?t have to worry about renters, fixing toilets or leaky roofs etc.
Re: Looking at financing in a different way - Posted by Chris in FL
Posted by Chris in FL on July 20, 2011 at 10:43:10:
Heidi,
This may not be what you have in mind, but… I pay 8% interest on first mortgages with low LTVs. Nothing sexy, but very safe. I pay on time every time, and have been doing buy and hold SFRs since 1998. I have a private lender now doing 6-8 year mortgages. I would be intersted in someone that would hold mortgages for a longer term, so I can go after slightly more expensive houses. If you are interested, let me know and we can talk details privately. All of my property is located in central Florida.
In my opinion, it’s always better to be the borrower, not the lender. You can always get a professional property manager to manage your properties. I don’t deal or talk to my tenants ever.
That makes sense. I just learned a little about private lending and found it fascinating. I was more thinking of carrying a 2nd short term maybe for a rehab property.