Hard Money Wanted & to Lend! [Archive] - Magic Bullets Family Forums

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Dan Auito

01-12-2005, 10:22 PM

Recently behind the scenes there have been a few private money lender requests and also inquiries on how to find it. Thought I would ask everyone to chime in on this topic regarding what you know about it, what you would like to know about it and if you care to lend money what your terms and requirements are.

let the games begin! :thumbsup:

brian-gibbons

01-12-2005, 10:25 PM

Recently behind the scenes there have been a few hard money lender requests and also inquiries on how to find it. Thought I would ask everyone to chime in on this topic regarding what you know about it, what you would like to know about it and if you care to lend money what your terms and requirements are.

let the games begin! :thumbsup:

If you go to my site www.creiu2.com you will find a HARD MONEY link on the home page.

Private money is BETTER than HARD though! :punk:

See http://www.creiu.com/creiu2/PrivateMoney/A_Home_Page.htm

karlpie

01-13-2005, 04:45 AM

Dan Auito

01-13-2005, 06:24 AM

Dan,

I forwarded to you an email that hopefully had most of the conversation I had had with one of the experts here. Did you get it and are you going to be able to duplicate here for all to see?

Let me know if you need further assistance in this.

I would consider it Karen but so much is flying that I'm afraid we'll just confuse everyone with a two sided conversation that they probably wouldn't take the time to follow like they would if it was presented one thread at a time and they could have had inputs along the way. Sort of becoming vested in the outcome. Hope you understand. Dan

REIaddicted

01-16-2005, 08:55 PM

I found this list of hard money lenders while searching the web. You might want to take a look. I haven't contacted any of them but I thought I would share the link

http://www.reiclub.com/hard-money-lenders.php

Just Information

01-17-2005, 01:19 AM

One of the greatest advantages of real estate investing is the power of leveraging other people's money.

When a property appreciates, it will appreciate on the value not on the original investment. Therefore, if you ‘leverage’ the property with "OPM". You can make an investment even more valuable by having the property rented out. The monthly mortgage payment is being paid by the renter and someone else is paying for your equity growth in the property.

"Money is a terrible master but an excellent servant." - P.T. Barnum

The best source of cash for your real estate business is other people's money. Perhaps one of the greatest "secrets" of the richest people in the world is summed up in those three words: Other People's Money – OPM for short. The majority of most successful people launched their fortunes using OPM.

Your goal is to not use your own cash. The most successful real estate investor tends to use OPM (Other People’s Money). Keep this in mind as you start to invest. Hold out for the limited money down or no money down deal rather than tying up a ton of money in one property. Leverage, terms and long loans can be great friends. Keep these principals in mind:

1. Leverage is simply controlling a lot of real estate with little or none of your own money. The more the better.
2. You should attempt to get the maximum loan to funding possible with each property.
3. The best loans have fixed interest rates and are assumable without qualifying.
4. Keep your equity as low as possible so you can keep more cash available for investing.

You can find "OPM" by writing to various lenders asking them if they would be interested in your real estate loan. By calling lenders in your area who might be interested in lending on your real estate proposal. By visiting in person lenders whom you think would be willing to help you. By looking on the Internet for real estate lenders who might work with you on the deals you have. By reading the Real Estate Section of your local large-city Sunday newspaper, looking for ads run by lenders in your area.

Find properties that have been sold in the past few months by searching the public records at the county recorder's office. Find property that sold to real estate investors by banks, credit unions, HUD, VA, FNMA, or any other major source and if the buyer is not an individual but say a corporation or partnership you have most likely bagged an investor.

The deeds should give the mailing address of the new buyer. Send them out a letter and tell them about your ability to locate real estate or better yet give them a call if listed.

Any one who has money could be a source of funds for your real estate purchases such as Doctors. Another great source is checking your recorders office again looking for individuals who holds mortgages on property. This has provided me a great source for hard money loans.

Retirement plans are a great source of real estate investment funds. Many people don't even know they can use their retirement plans funds to invest in real estate, mortgages and trust deeds. Many, once they stash it away, forget they even have money in a retirement account.

Many investors think that money (or lack of money) is what stops them from closing a deal.

This is not true it is a myth that holds some investors back.

Understand that money is NEVER an issue - IF the deal is right, the money will come.

Simply think creatively, go to the source of funds and simply ask for money. The worst that can happen is you get a "NO". Each NO only places you closer to a "YES".

Dan Auito

01-17-2005, 01:26 AM

REIaddicted

01-17-2005, 01:44 AM

Just reiterating what John just said. When you find a deal that provides good margins of profit(20% min) the money to fund it will usually find you!

Key: find undermarket property and lock it down by getting your contingent offer accepted while you finish getting your ducks in a row to close the deal!

When john and I were in PM, john said " stop chasing after $, it has 12 legs and you have 2. Who will out run who? "

He also said, " if you stop chasing, then it will come to you when the deal is right, AS long as you have done your homework and laid the ground work"

hmmmmmm

Just Information

01-17-2005, 01:51 AM

Ha Girl,

You keep letting all my secrets out :wink: I will have to retire as one of those BTO's :SM013: just to make room for you and all the others you are sharing knowledge with.

Keep up the good work and thanks for letting me know about this forum. :SM093:

DionEvalueMortgage

01-17-2005, 06:59 PM

Just for giggles. Hard money. I think some newbies throw this term around not really knowing what it is. Hard Money is not your friend! One step below a legal loan shark. The rates are at the least 13%. They tend to do their own appraisals, so as to under value the property a little to protect themselves. The benefits, no credit check, no mortgage history check no employment check. They don't care because if you default they are going to take your home and if you don't they are going to make a killing on it. Traditionally 65% is max LTV for hard money. If you think you need it call a mortgage broker they most likely have a couple in their pockets. I only use them when possible to buy out people in foreclosure and even then...not that often.

Private money...like it was put earlier. Not so bad. Big difference!

:xxrotflma

Just Information

01-18-2005, 07:44 PM

I agree fully, hard money is just a tool for investors! Hard Money also known, as HML should only be used as a source for fast cash purchases and short term flips.

If you are new to the business, this is one area to do extensive research and know what you are getting into.

As a new investor without cash or credit, you will be better served bird dogging for other investors until you get enough knowledge to play in this arena.

Aldo

01-19-2005, 04:39 AM

I just wanted to stop in to thank those who warned new or uninitiated investors of the potential hazards in using hard money. It's a great tool for those who know how to use it.

Look at hard money as you would a gun. Without proper training, it can do a lot of damage if it turns on you.

REIaddicted

01-24-2005, 03:36 PM

I found these on another forum as investor friendly lenders.
http://www.reiclub.com/forums/index.php?board=26;action=display;threadid=2998

New Century

http://www.ncen.com/

IndyMac
http://www.indymacbank.com/

Option One

http://www.oomc.com/

brian-gibbons

01-24-2005, 09:41 PM

I teach about Private Money.
I have done Hard Money.

Private Money Costs less. And Risks less.

Example:
note: only example. many different HMLs out there.

$100,000 Current Value
65% LTV
no credit check
10 pts rolled into loan
15% Interest Only paid monthly

Cons:
Hard to find 65% deals
Usually you need SOME cash to improve to RENT or RESALE CONDITION

Pros: If you are ABSOLUTELY BROKE, and can find 50% LTV deals, and you can get 15% rehab money, then go ahead, pay the 10 pts!

Private money is like Semi-hard money

80% LTV
5 pts or less
10-12% Interest Only Paid Monthly or Quarterly
1 yr call to 5 yr call balloon

You find your Private Investors many ways.

1. CPAs
I train Rehabbers and Wholesalers how to talk to CPAs about self-directed IRAs and Real Estate.

2. Fee based Financial Planners
I train Rehabbers and Wholesalers how to talk to Fee-based Financial Planners about self-directed IRAs and Real Estate.

3. 401(k) and SEP Retirement IRA Account Holders
*note: for those of you who never heard of a SEP, it is 401(k)s for Selk-Employed folks. Keoughs and Simple IRAs too.

One of my favorite ads to attract Private Money is:

FIRE YOUR IRA Advisor!
Earn 11% or MORE!
Retire your tiny 5% Investments!
Roll over your IRA w no penalty!
Use Real Estate and Sleep Well!
Free Report! xxx-xxxx lv message

Good solid articles on
http://www.earn-huge-returns.com/

All the best to MB.com,

Brian Gibbons :beerchug:

REIaddicted

01-24-2005, 10:15 PM

brian-gibbons

01-25-2005, 08:54 AM

Isn't this advertising ?

let's not go there again please :frown:

1. CPAs
I train Rehabbers and Wholesalers how to talk to CPAs about self-directed IRAs and Real Estate.

2. Fee based Financial Planners
I train Rehabbers and Wholesalers how to talk to Fee-based Financial Planners about self-directed IRAs and Real Estate.

3. 401(k) and SEP Retirement IRA Account Holders
*note: for those of you who never heard of a SEP, it is 401(k)s for Selk-Employed folks. Keoughs and Simple IRAs too.

Good solid articles on
http://www.earn-huge-returns.com/

Do you know when the 10th WORST stockmarket crash was? And it was recently?
http://mutualfunds.about.com/cs/history/p/crash10.htm

Did you know that there were changes in the federal tax code, which took effect in 2002, that increased the financial limits for 401 (k) plans? and they also exempted so-called elective contributions to plans, such as real estate, from limits on deductible contributions, expanding what investments people could put in their 401 (k) plans?
http://www.earn-huge-returns.com/2wed-jan-16-2003.pdf

Roth IRAs Offer a Way To Invest in Real Estate

Looking for another way to invest in real estate? Try a Roth IRA. Real estate has become an increasingly important way to diversify retirement-plan holdings, thanks to new tax laws that increased limits on contributions to individual retirement accounts combined with the stock-market bust. Among some creative ways to do so -- and pay no tax on the gains accumulated from the property: Convert a traditional IRA into a Roth IRA and use the plan to acquire real estate; or start a separate Roth IRA and then buy a partial interest in property through entities known as tenant-in-common programs. http://www.realestatejournal.com/columnists_com/buildingvalue/20030729-buildingvalue.html

More About Roth IRAs And Property Purchases

Real estate has become an increasingly important way to diversify retirement-plan holdings, thanks to new tax laws that increased limits on contributions to individual retirement accounts and the aftermath of the stock-market bust.

Question: I am 30 years old and have been saving for my retirement in a Roth IRA. I live in San Diego and wanted some insight on whether I should cash in my IRA to buy my first condo or home. I have concerns about wiping out my retirement for real estate. I also have a 401(k) with the Navy but didn't know if I could use both for a purchase. What are the pros and cons of using funds from my IRA for a down payment to buy real estate?

Question: Can a Roth IRA borrow money to buy an investment property?

http://www.realestatejournal.com/columnists_com/buildingvalueqa/20030730-smith.html

Can a 1031 Exchange Fund New Construction?

Question: Is there some way of qualifying for a 1031 exchange when selling a commercial property and exchanging it into land I already own, on which I plan to develop an apartment complex?

http://www.realestatejournal.com/columnists_com/buildingvalueqa/20040107-smith.html

Can Rehab Costs Be Tax-Deferred?

Question: I plan to sell an investment property at a nice gain, and use the proceeds to purchase and rehabilitate a larger investment property. I would like to use a 1031 exchange. Can I use some of the gains from the property sold to perform rehabilitation work on the property acquired, and still have that part of the gains be tax-deferred? Or do all of the gains have to be used to purchase the new property? I'm looking at larger properties that are in need of rehab. All monies would eventually be invested in the new property after rehab is completed. There would be no "boot" (extra proceeds).

http://www.realestatejournal.com/columnists_com/buildingvalueqa/20041103-smith.html

Consider Using an LLC When Buying Property

Question: As a first time commercial real-estate investor, I am confused with advice from our accountant. He has advised us to purchase commercial property, with the intent to lease, under our personal name rather than our S-corporation. [S-corporations are often closely held small businesses that don't pay corporate taxes. Instead, the profits flow to the owners, who pay taxes at their personal rate.] Our plan is to purchase properties, lease them, and continue doing so even after we retire from our primary business for retirement income. The accountant is concerned that we won't want to continue to operate our S-corporation when we're older. If we then transfer the properties to our personal name, we'd have to pay capital-gains taxes. What are the advantages and disadvantages of making the purchase under a corporate name versus our own?

http://www.realestatejournal.com/columnists_com/buildingvalueqa/20040331-smith.html

Seek Foreclosure Lists From Local Companies

Question: How does one get a list of foreclosures from a title company?

Question: I own a few rental buildings and wonder whether it makes sense to have each building in a separate limited-liability company (LLC) to insulate it from the others in the event of a lawsuit. Does that approach offer additional protection?

http://www.realestatejournal.com/columnists_com/buildingvalueqa/20040519-smith.html

Consider Using an LLC When Buying Property

Question: As a first time commercial real-estate investor, I am confused with advice from our accountant. He has advised us to purchase commercial property, with the intent to lease, under our personal name rather than our S-corporation. [S-corporations are often closely held small businesses that don't pay corporate taxes. Instead, the profits flow to the owners, who pay taxes at their personal rate.] Our plan is to purchase properties, lease them, and continue doing so even after we retire from our primary business for retirement income. The accountant is concerned that we won't want to continue to operate our S-corporation when we're older. If we then transfer the properties to our personal name, we'd have to pay capital-gains taxes. What are the advantages and disadvantages of making the purchase under a corporate name versus our own?

Question: How can an individual find short-sale opportunities?

http://www.realestatejournal.com/columnists_com/buildingvalueqa/20040331-smith.html

Can You Gain Access To a 'Blank Check' Loan?

Question: I am in the process of learning how to buy a foreclosure-type property (either pre-foreclosure or at auction). I live in La Jolla, Calif., where real estate has gone crazy and bidders at auctions bid without seeing the properties. It also seems as if every investor is using money orders and cash to get preapproval to bid on the foreclosures. How can I get access to a real-estate loan that acts like a "blank check" up to a specific amount allowing me to bid on properties at auction?

Question: Can you sell a property for $400,000 using a 1031 exchange, pay off a mortgage of $200,000 and then reinvest the other $200,000 in real estate and defer capital-gains taxes? Or will I have to pay capital gains on the unused portion?

http://www.realestatejournal.com/columnists_com/buildingvalueqa/20040707-smith.html

Investment Pros Field Flood of 401(k) Queries

A recent Building Value column focused on new tax laws that allow self-employed investors a way to put real estate into some 401(k) plans. The column generated much interest from readers, with many seeking more information about single-participant 401(k) plans.

The changes in the federal tax code, which took effect in 2002, increased the financial limits for 401(k) plans. They also exempted so-called elective contributions to plans, such as real estate, from limits on deductible contributions, expanding what investments people could put in their 401(k) plans.

Some firms, such as Salomon Smith Barney, a unit of New York-based Citigroup Inc., and Entrust Administration Inc., of Oakland, Calif., are offering services that allow real estate to be placed in single-participant 401(k) plans. Self-employed investors can put up to $41,000 a year into a one-person 401(k) account.

Here are some questions from readers, with responses from the pros:

Does a commercial real-estate landlord, who can take depreciation and other forms of tax shelter on his personal return, have to pay taxes on the income generated from a property purchased with debt (in the form of a mortgage) for a retirement plan? Or can the person shelter some of this income by using, say, depreciation as he could outside the retirement plan?

Can timberland be included in a real-estate solo 401(k)? What about foreclosed properties purchased from a municipality or bank?

Does the IRS issue guidelines for the qualifications of the appraiser or for the amount of detail required in the appraisal process?

Is a self-employed individual with two rental condominiums eligible to include that rental income in a 401(k) account under the new tax laws?

http://www.realestatejournal.com/columnists_com/buildingvalue/20030121-buildingvalue.html

How to Use a Roth IRA To Buy Property

Question: I currently own a Roth IRA and a rural bed-and-breakfast in a tourist community. We wish to add on to the current B&B and make two inns. We are also considering building three more. Can I fund these deals through my Roth without the Internal Revenue Service considering them taxable events?

Question: The Internal Revenue Service's 25% depreciation-recapture rate applies to properties "placed in service" from 1981 through 1986. What is the meaning of "placed in service?" I own commercial property purchased during those years (1981 through 1986), however the properties were built prior to 1981. Would section 1250 apply to my situation?

http://www.realestatejournal.com/columnists_com/buildingvalueqa/20030903-smith.html

REIaddicted

01-25-2005, 09:38 PM

That is what we are looking for. SOLID info :cool:

realestate

02-03-2005, 04:58 AM

REIaddicted

02-03-2005, 05:07 AM

And this isn't

Real estate investing is not a cheap one-night stand; it's a life long commitment.

Not enough education is being provided so I founded Stealth Educational Services to help investors apply better strategies. http://jmichaelrei.com

Postings are based upon my experience/knowledge and I am not liable for any damages arising out of use.

Real Estate Investor - Author - Seminar Speaker - REI Coach

come on now!!!

Realestate,
This is a friendly place and I refuse to get in to a battle of words ! Please don't take up the mantle on this post as well. Just answer the challenge that I threw out. We can ALL learn from what you have to contribute.
See , I am staying in my nice mode :SM136:

realestate

02-03-2005, 06:25 PM

Realestate,
This is a friendly place and I refuse to get in to a battle of words ! Please don't take up the mantle on this post as well. Just answer the challenge that I threw out. We can ALL learn from what you have to contribute.
See , I am staying in my nice mode :SM136:

You are the one who started this remember your long post:

Whoa they're Real estate. Let's just take a look at a few things. First the Tax deed post, request to be removed was NOT because the correct answer was not given. There were other reasons, so please don't assume things.

Second the advertising that you don't agree with. The same signature is on almost everyone of the forums he participates in. He has accomplished a great deal and there is nothing wrong with a person advertising that fact. I don't see it as self-serving at all. And EARN the free advertising.... I believe he has indeed done that already. He has helped many people, even to the tune that someone will call, he will coach them through every step of a deal... with out charging a penny !!!!
I believe anyone, newbie or experienced would only benefit from visiting his site, download all the free information and YES, purchase some books.

Let's take it a step further:
You want to buy and sell houses, are you going to accomplish that by:
A. Sitting at home thinking about it, never to pass out a business card, make a call or send out letters?
OR
B. Get out there, pass out cards, post signs, send letters, place door hangers but you don't let those closest to you know what you do.

Would A or B make you successful?

Let's say you do B but tuck all your money in a savings account. Continue to rent the house you live in, never go on a vacation, drive a hooptie that is always cited for being a hazard, never helping others in need? Could of you been more successful? Would you miss out on opportunities?

My point here is, John does have a lot to offer. His posts have meat in them, people learn from what he has to share. John also makes a point in letting everyone know what he does, where they can find information.

Much like as an investor, we will all be more successful and lessen the chance to miss out on an opportunity by letting everyone we come in contact with know what we do. (Bird dogs: cable people, waitress at the restaurant, next door neighbor, co-workers)

If you don't care for his posts, pass by anything that has his name attached to it. You may also miss the opportunity to learn something valuable that could indeed be a golden nugget in your business. That is one of the great things about this forum. There are so many different views that we can all learn from each other. The same way there are a number of other forums that Dan himself refers people to.

We are all in this business together. We rely on each other, teachers, coaches, and friends to help us expand out knowledge. We don't want to become a forum divided that is one of the reasons we all seem to be drawn to Dan's site. We are all helpful, not hateful.
As Dan has said, don't count John out just yet. He is still occasionally posting on threads.

What was that all about?

My point was Do what you say you are going to do , if you can't then say hey guys sorry I said I was going to post about this but I can't.

That whould have shown more character. Then you come a long acting like a zealot by posting the quote from you above that really had no bearing on what I said.

I have an idea for you fight your own fights and not post bs like the one above this. Then you tell me:

Second the advertising that you don't agree with. The same signature is on almost everyone of the forums he participates in. He has accomplished a great deal and there is nothing wrong with a person advertising that fact. I don't see it as self-serving at all. And EARN the free advertising.... I believe he has indeed done that already. He has helped many people, even to the tune that someone will call, he will coach them through every step of a deal... with out charging a penny !!!!
I believe anyone, newbie or experienced would only benefit from visiting his site, download all the free information and YES, purchase some books.

What Brian-Gibbons can't advertisae and John Michael can?

I think this all started by you "ie: Whoa they're Real estate, then the b.s. that followed. Im in nice mode to by the after all when Dan posted:

All right everyone PLAY NICE! Forums are not always easy to manage with many different views coming out from many different mindsets, this is one of the reasons a forum like this is so valuable and to that I may add that, this indeed is what does create the value!

I don't mind entertaining a respectable amount of low key advertising along with an informative post and John in my eyes contributes FAR more than he takes away, koodo's to John!

A good forum it is said should be in the best sense left alone to regulate itself naturally with the majority voice being heard and anyone who is on the edge of the unpopular vote taking the appropriate hint without much else needing to be said.

If the hint isn't taken then you could say a violation of the unspoken rules has been broached, breached or otherwise ignored, at that time they would get their warning from the head office .

Try to remember everyone is here by their own accord and attraction to one another so try and understand the next persons viewpoint even if you disagree, if you don't want to view the post just move on to the rest and enjoy the experience.

Hope this cools the fires and keeps everyone on track to building a stronger community through mutual support, understanding and temperence.

We really are just getting started here so lets work together to build something that others will marvel at once they find it in the future! At this time no one is out of line on these boards and I hope to see each of us working jointly together as a T.E.A.M. to make it all that it can be!

T.E.A.M. Together Everyone Achieves More!

I just droped it, after all you can't argue with some one who missed the point and is to close to the forest to see the trees. But alas you have to accuse me of taking up a mantel that I dropped out of respect for Dan.

Realestate,
This is a friendly place and I refuse to get in to a battle of words ! Please don't take up the mantle on this post as well. Just answer the challenge that I threw out. We can ALL learn from what you have to contribute.
See , I am staying in my nice mode

Refer to your post at the top. you started this. Why you posted like that I dont know. You've contradicted your self by attacking Brian-Gibbons for doing the same thing you defend John for give me a break.

From now on I would suggest you let people defend them selves before you post your tirades that have really no bearing on the issues in the post.

P.S read John T Reeds: The real estate B.S. artist detection checklist

www.johntreed.com/BSchecklist.html (http://www.johntreed.com/BSchecklist.html)

REIaddicted

02-03-2005, 06:57 PM

RealEstate,

As I have told you before. We are going to just have to agree to disagree and go on our separate ways on the matter. We have 2 different views and that is just fine by me. I prefer to be productive here by offering advice and learning from one another.

John T Reed? NEVER touch the stuff. I choose NOT to waste my valuable time reading trash, but thanks anyway.
PLEASE understand this: I have NO desire to spend MY VALUABLE time replying to or reading unproductive posts. This WILL be the last post that I offer you on the subject matter.

Now, let's talk about what subject you would like to research and post? Let's use our time educating and helping each other.
Best to you in your future endeavors.
Lisa

Dan Auito

02-03-2005, 09:58 PM

Call a truce and agree to disagree, Lisa I see no need to go any further on this one either. Let's move on to more productive discussions on topics more near and dear to hearts. :thumbdown :SM099: :SM117:

realestate

02-04-2005, 01:51 AM

Dan Auito

02-04-2005, 02:49 AM

Then don't preach to me about something I said then turn around and do the same thing to somebody else. Seems to me your a little in the wrong but wont admit it.

Realestate, let the readership decide for themselves. When people read posts they do tend to come to their own conclusions without much needing to be said from the parties to the disagreement. Am I gonna have to give you another cup of that coffee? :SM112:

realestate

02-04-2005, 05:20 AM

Realestate, let the readership decide for themselves. When people read posts they do tend to come to their own conclusions without much needing to be said from the parties to the disagreement. Am I gonna have to give you another cup of that coffee? :SM112:

Im just saying Dan she crossed the line with her first examples from the other posts.

And no I'm sorry to say I dont trust the coffee machine any more it has a bad water line or some thing.

But hey rei no hard fellings have a cup on me. :smiley21:

www.cartoline.it/pics/_zoom_flash.htm?immagine=scherzi_150404_01.swf (http://www.cartoline.it/pics/_zoom_flash.htm?immagine=scherzi_150404_01.swf)

Aldo

02-04-2005, 05:34 AM

I agree with Dan's suggestion to move on. A wise mentor once said to me, "If both of us thought alike, one of us wouldn't be necessary." I won't publicly take sides on this, but I beg all to put their guns away. We are, afterall, here to help each other and anxiously await the chance to help others. Exactly how long will a newbie hang around when the first thing s/he reads is supposed advisors in a spitting match?