Posted by timeinvestor on October 15, 2003 at 16:08:30:
Being able to close in 5 days with all cash is huge, agreed, but it also means that you are on the hook. Agreements that are written by the investor, rather than the seller or the real estate agent will reduce your risk substantially and they do not need to be shady or sneaky, just in the investor’s interest rather than the agent or the seller’s.
Difference of opinion is fine and expected, but questioning whether I know what I’m doing or not is not very friendly. If you hear people say it all of the time, maybe there’s some truth to it. The reason that I have less liability is ‘exactly’ because I know what I’m doing. If you don’t believe that, it means that you have another way of doing things. Do you believe that there is more than one way to skin this cat? I sure do. Opinion! We all have one and the smart ones realize that another opinion is reason to explore, not a reason to contradict. After all, isn’t creativity what we are talking about anyway?
My company’s options are limited, on one hand, because we don’t use our own money and therefore “sometimes” don’t get the deal that you may get. On the other hand, we are NEVER overexposed or stretched so thin that we are only able to work on a few deals per year rather than 50 or more. Opinion is a good thing. Creativity is a good thing. Open minds are a necessity!
Business Plan on Rehabbing & Reselling - Posted by chris-atl
Posted by chris-atl on October 15, 2003 at 05:48:24:
Does anyone have a good solid business plan on rehabbing and reselling that has been successful that they wouldn’t mind sharing with the group? I want to put one together to approach a bank about obtaining a working line of credit. I understand some people may feel their business plan is private, but if you are comfortable sharing it, it will be appreciated. Thanks for your help!
Just do a business plan. What is so hard about that? Go to the library, get a book on business plans, and go to work. The first draft will be rough, but that’s expected. Keep working it until you think it’s in good shape. Then – and only then – take it to someone who will give you good sound advise (even if it costs you a few hundred dollars).
The business plan is NOT for the bank. It’s for you. Remember that.
Re: Business Plan on Rehabbing & Reselling - Posted by Del-Ohio
Posted by Del-Ohio on October 15, 2003 at 22:11:50:
I would email Ed Garcia on the financing site. He is the fellow wo runs the seminar on “How To Get Lenders Fighting To Give You Money” Seminar. One of his strategies is presenting a business plan. He should be able to steer you in the right direction.
Re: Business Plan on Rehabbing & Reselling - Posted by timeinvestor
Posted by timeinvestor on October 15, 2003 at 07:16:11:
The way that we’ve run our REI company, from the begining, is we don’t use our own money. Everyone has a diferent opinion on this, but it’s actually a good rule of thumb even if you are already rich. Less exposure!
In General:
Negotiate with seller so that by the time you owe money for purchase or existing mortgage payments you have the buyer’s funds to pay it with. Again, if you are already well off, this method will keep you with less risk. It’s a Ron Legrand philosophy and it’s been a real good rule for us. Not only to keep us successful, but to keep our stress levels down and therefore keep us from quitting when it gets hard.
Re: Business Plan on Rehabbing & Reselling - Posted by ken in sc
Posted by ken in sc on October 15, 2003 at 07:08:32:
Jimmy Napier once had a seminar in which he said whenever you want to borrow money frm a bank, you must always answer these questions in your letter or business plan you present to the bank:
How much do you want to borrow?
What are you going to do with the money?
What is the collateral?
How and when will the bank get paid back?
What is an alternate form of collateral?
Your answers might be:
80% of appraised value.
Buy houses below market to repair and sell.
The house.
When you sell.
Your financial statement, stocks, paid off car, etc.
I hear people saying this all the time, but still don’t believe it. I have purchased at least 5 properties so far this year at incredible discounts that I know for a 100% fact that I would NOT have bought if I hadn’t offered an all cash closing in 5-10 days. Sure it might reduce your risk (I don’t even believe that, if you know what you are doing) but it definitely limits your options. Being able to pay all cash for a property and close in 5 days is VERY powerful.