More questions & answers about our business - Posted by Merle
Posted by Merle on October 28, 2000 at 21:29:03:
Following are some more questions received in an email. I?ve deleted some of the conversation, leaving only the questions and the background info.
?I have been trying to break into the REI field for the last year. The problem here as far as the methods that most people on CREonline use, is that this is an extremely small community and very frontier in it’s flavor. People here tend to distrust anything that is even a little creative, especially when you start talking lease option or anything that is no money down. I am finding that if you want to deal here you just have to have some money, at least to get a start. The only deal I have done so far is my own house, a duplex. Only $1500 out of pocket and 5% interest on the buy. A good deal, but strictly conventional.?
?Unlike some, I am not trying for “pie in the sky” i.e. no money, no job, no credit, bad credit. I have studied this board for some time, have bought courses, and have been out in the streets. I have seen lots of deals that good profit could be made on, but it took some money out of pocket.?
?My wife and I are older almost retirement age, recently married after long term marriages that ended. So we are basically starting over again with nothing. We know, and are determined that we can make our retirement through REI. Presently we have no retirement at all, and both lost everything we had from our previous marriages. Sorry for making this so long but wanted to just give you a bit of history, so you know that we are not just a couple of flakes.?
?I wanted to ask you about the private financing that you get.?
- “Can you tell me how you structure your financing? I mean, are you getting people to put just some money into a deal or finance the whole deal? Or do you get more than one person to put money into one deal?”
In previous posts, I explained that we used to get several people on each property, however, we now use only investor per property.
- “How do you structure the repayment of their money, what do you offer as security, 1st. mort. 2nd. mort. personal guarantee, note? I am a bit unclear on this part, as you can see.”
Today, we offer monthly interest payments only. Their principal amount remains intact thru the term of the note. For security, they receive a Deed of Trust ? almost always a first position.
- “You mentioned a couple of places to look for this private money, are there others that you have had success with?”
Actually, we advertised only two places. The little shopper newspaper called Pennypower and on our weekly radio program we did for two years. We have done neither of these for more than two years. All our loans come from referrals or additional money from current investors. And, as I said earlier, we get far more today than we can use.
?I have thought for some time that this was the way to go as far as financing goes, just did not know how to attract the people who had it.?
?Sorry to be so long winded, and hope this is not an imposition. ?
In case you haven?t done so, you can do a search for ?Merle? and find all the posts I?ve made concerning how we do our business. Might give you a little more insight. Be glad to answer all questions as I have time.
Merle