Posted by Hank FL on October 21, 2003 at 08:18:43:
SDI = Success Development International
Ron LeGrands old company.
Use Google to find them.
In my area everyone and their uncle is looking for fixers, but they aren’t necessarily looking at hard money. The stock market has picked up recently, but has not been good for years. Real estate has been hot. This has not been gone unnoticed by Joe Civilian.
These guys don’t know about hard money and wouldn’t “get it” even if they did I’m think’n.
These folks don’t have a flipping course which tells them to use the “formula” (MAO=ARV x 70% - repairs & “never pay MAO”)
So I’ve asked some of these guys I see at these rehabs what their crtierion is.
These guys haven’t put pencil to paper on this. If they did, I don’t know what that paper looks like. It’s a HOT market; they just want in and their friendly Realtor has been all to happy to help them overpay. If the houses are financeable, they get some kind of loan and pull the cash out of their pockets to rehab or just pay the whole amount out of pocket they had in stocks or making 2% in the bank.
Then you have all the seminar students that know about what to pay, but overpay due to extreme enthusiasm with some heavy speculation thrown in for good measure. This mad appreciation will go on forever, won’t it ?
Then you have the rental guys that just want to rehab enough to get it “rent ready” and then they’ll refinance to pull out some dough. Their costs are much lower because they aren’t going for that retail buyer. They can pay more than the hard money guy.
What makes my point in a succunct way is the REO market.
Several years ago -before I got in- guys were buying REOs at 50-65 LTV (w/hard $) all day long.
All these other people are out bidding them.
I could be wrong, but I think I’ve seen a good portion of this hard $ lending dry up.
That’s why I mentioned the undercutting idea so as to put that money to work in short order.